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Motorola loses grip of handset market

Posted: 30 Nov 2007 ?? ?Print Version ?Bookmark and Share

Keywords:handset market? Motorola Razr? Gartner report?

Motorola continues to lose ground in the global share of mobile phone sales, according to Gartner Inc.'s latest analysis of the sector.

The market research group says worldwide sales of mobile phones in Q3 grew 15 percent compared to the same period last year, with 289 million units shipped, compared to 251 million.

Nokia maintained its top position, while Samsung again took the No. 2 position, taking advantage of Motorola's continued weak performance.

Looking ahead, Gartner said it expects strong sales for Q4 with sequential growth of at least 10 percent, and maybe as high as 15 percent, which would lift annual shipments to 1.14 billion.

Nokia's share is put at 38.1 percent for Q3 2007, up 3 percentage points from the same period last year. The Finnish group sold 110 million phones in Q3.

Samsung's share also increased, to 14.5 percent from 12.2 percent in Q3 2006, but Motorola took a major hit, with its market share declining to 13.1 percent from 20.7 percent in Q3 2006.

Carolina Milanesi, research director for mobile devices research at Gartner, commented: "Even though relatively few models were introduced this quarter, overall sales exceeded expectations. Mobile phone sales were mainly driven by strong performances in Asia/Pacific and Eastern Europe, the Middle East and Africa."

Pale Moto
Reflecting on Motorola's performance, she said the company now "is a pale version of the company it was a year ago."

In 2005 and 2006, Motorola performed well, mainly on the back of its ultraslim Razr range. The company's Razr2 was received well and accounted for 900,000 of the overall sales, but "Motorola needs a much stronger portfolio to return to its former market share," Gartner said.

Ed Zander, Motorola CEO, recently stated that the handset business is still a vital one for the company and promised to return it to profitability next year.

Gartner suggests Nokia also managed to raise operating margins in the quarter, despite the fall in average price of its phones. The lower average price was linked to the higher proportion of ultralow-cost devices sold in the quarter.

In the ultralow-cost devices section, Nokia was the main provider as Motorola shifted focus away from them, since volumes are high, margins are low.

The fourth and fifth position in the Gartner rankings are taken by Sony Ericsson, with an 8.8 percent of market share in Q3 2007, up 1 percent on the same period last year, while LG also increased its share by 1 percent to 7.1 percent. The figures mean the top five represent nearly 82 percent of total global sales.

24.5M units in India
On a regional basis, Asia/Pacific mobile phone sales climbed 26 percent year-over-year to 101.8 million units. Indian sales were 24.5 million units, the largest growth in the quarter. Sales in Western Europe reached 47.2 million units, up 14.9 percent from last year, and average penetration in the region is now 115 percent.

North American sales were 45 million units, up 10.3 percent, mainly due to the Apple iPhone that sold more than one million units in its first quarter.

Ann Liang, principal analyst for mobile devices research at Gartner, said : "India's performance was driven by CDMA phones and fierce competition among operators of global systems for mobile communications, GSM, networks, which stimulated sales of replacement phones and allowed operators to penetrate rural areas quickly."

- John Walko
EE Times Europe

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