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World phone shipments to slip in Q4 - analyst

But year's total to rise

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Global mobile phone shipments will fall during the last three months of 2004, market watcher iSuppli has warned, as inventory stockpiled during Q3 hits production.

However, strong third-quarter shipments encouraged the company to up its annual shipments forecast to 675m units from the previous prediction of 670m. The new figure, if achieved, would see 2004's sales 18 per cent up on 2003's figure.

Handset shipments hit 170m units during Q3, up less than one percentage point from Q2's 168.5m units, its down slightly on Q1'2 169.5m. iSuppli reckons that shipments will fall to 167m units in Q4, a decline of 1.8 per cent over the previous quarter.

The research company attributed the dip to a glut of unshipped handsets in China. Inventory began to build up during the summer, iSuppli said, and there are still sufficient stockpiles of finished phones out there to dampen production during the current quarter.

During Q3, Nokia's pricing strategy - its average selling price (ASP) was down five per cent sequentially - allowed it to boost shipments to 51.4m units, up 13.2 per cent from Q2's 45.4m, pushing up its market share from 26.9 per cent to 30.2 per cent, iSuppli said.

Other vendors experienced rising ASPs between Q2 and Q3, and saw only small quarter-on-quarter gains or losses of market share. The upshot was that Nokia not only gained market share but extended its lead over its rivals. The gap between its share and that of the world's second biggest mobile phone maker, Motorola, grew from 12.6 percentage points in Q2 to 16.5 percentage points in Q3, for example. ®

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