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Growth plunged in Q1

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Worldwide mobile phone sales slowed during Q1 2005, with year-on-year growth dwindling to under ten per cent - the lowest rate in two years - market watcher Strategy Analytics (SA) said today.

During the quarter, some 172m mobiles were shipped, mostly from the top three vendors, Nokia, Motorola and Samsung. That's well down on Q4 2004's total, 196.6m units, but no great surprise given the traditional strength of the Christmas sales season.

But while Q4 2004's shipments were 23 per cent up on Q4 2003's total, Q1 2005's year-on-year growth was 9.5 per cent, from Q1 2004's 157m shipments. Each quarter's year-on-year growth has fallen since Q2 2004, SA's figures show, after Q1 2004's year-on-year growth of 44 per cent.

SA said demand softened in all regions, especially in South America and Western Europe. However, upgrades to 3G handsets lifted demand in Japan and South Korea - but not enough to lift the global market as a whole.

Market leader Nokia's share of the world handset business fell slightly sequentially, but was up year-on-year, as were all the other major vendors, with the notably exception of Siemens. Its share fell from 8.2 per cent in Q1 2004 to 5.4 per cent in Q1 2005. Sony Ericsson's share fell too, but only by a tenth of a percentage point. SA cited Sony Ericsson's "lacklustre" device line-up and Siemens' weakness in its European heartland as key reasons for these vendors' lack of success.

LG saw the biggest year-on-year market share growth, thanks to strong North American sales.

Of the majors, only Motorola and Samsung were able to make sequential market share gains, rising from 16.2 per cent in Q4 2004 to 16.7 per cent in Q1 2005 and 10.7 per cent to 14.2 per cent, respectively.

SA maintained its October 2004 forecast of eight per cent growth in unit shipments for 2005, from 2004's 680.5m units to a predicted 735m handsets, and well down on 2004's increase of 31.6 per cent over 2003's total shipments. If that's the case, quarterly year-on-year growth rates have further to fall. ®

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