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iSuppli: Nokia rules but Sony Ericsson 'wows' cellphone market

Posted: 31 Jan 2007 ?? ?Print Version ?Bookmark and Share

Keywords:Nokia? Sony Ericsson? iSuppli? cellphone? electrophoretic display?

Nokia Corp. reigned last year's mobile handset market but Sony Ericsson made the biggest impact, reports iSuppli Corp.

Nokia's unit shipments hit 348 million in 2006, with unit shipments of 106 million units in Q4, up from 83.7 million in a year-ago period. Meanwhile, Sony Ericsson posted the largest q-o-q growth in Q4 for all cellphone makers. Its Q4 shipments rose 61.5 percent to 26 million units, up from 16.1 million units in a year-ago period. iSuppli reported that Sony Ericsson's shipments increased to 74.8 million units in 2006, up 46.4 percent from 51.1 million units in 2005.

"Sony Ericsson is targeting its entire product line at the mid-to-high range of the market and just recently has started entering the emerging low-cost handset market," said Tina Teng, wireless communications analyst at iSuppli. "This has contributed to the company's accelerated growth in 2006. Plus, Sony Ericsson's products appeal to every regional market globally, because its camera- and music-enabled phones hit the sweet spot in terms of desirable handset features."

Meanwhile, Motorola Inc.'s RAZR phone fueled the surge in the company's mobile handset shipments last year, reaching 48.6 percent to 217.4 million units, up from 146 million units in 2005. In Q4, Motorola shipped 65.7 million units, up 22.3 percent from 44.7 million units from a year-ago period.

"The success of the RAZR handset pushed the whole industry to go thin," Teng said. "Now virtually all of the upper-echelon phone OEMs have super-slim handset models."

Motorola also introduced the first phone equipped with an electrophoretic display to the emerging low-cost market in late 2006. However, the display did not allow consumers to enter many words or characters into the phone, which is required in certain emerging market regions specifically India and China, according to Teng.

Trouble for Korea OEMs
Samsung Electronics Co. Ltd. and LG Electronics both suffered sales declines in Asia, leading to inventory build-ups that the companies must deal with in the first quarter. The issues caused LG to drop a rank to fifth place in 2006, down from fourth in 2005. Unit shipments from the handset OEM rose to 64.4 million units in 2006, up 17.4 percent from 54.9 million units in 2005.

LG also posted a flat fourth quarter, with shipments of 17 million units, up just barely from 16.2 million units from a year-ago period. However, the company hopes that its Chocolate product line and the U.S. debut of Shine will push it back to fourth place.

Samsung ranked third in the segment in 2006 with 117.9 million units, growing 14.6 percent from its 2005 total of 102.9 million units. But the company must watch its back because Sony Ericsson is gaining on it, according to iSuppli. In Q4, Sony Ericsson was only 5.9 million units shy of Samsung's Q4 shipments of 31.9 million units.

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