GPRS, colour, MMS to fuel Q3-Q4 phone bounce back

The global mobile handset market suffered its first real decline ever last year, and in 2002 it is likely to only return to low single-digit growth, predicts market research house Gartner Dataquest, a unit of Gartner Inc.

In 2001, total worldwide mobile phone sales fell 3.2% to 399.6 million, compared to a compound annual growth rate of around 60% between 1996 and 2001. In 2002, Gartner Industry Analyst Carolina Milanesi predicts that the situation will be nearly slow, with "contained growth" for the entire year.

"Not much will happen in the first or second quarter, as subsidies have come to an end in many markets," said Milanesi. The market is likely to re-ignite in the third and fourth quarters of 2002, when new mass market phones with support for new standards such as GPRS (General Packet Radio Services), color screens, and mobile multimedia messaging (MMS), pushes existing users into replacing their old handsets.

But 2001 has some particular low points, which are unlikely to be repeated in 2002, suggest Gartner. The major problem in 2001 was that operators in two major global markets, Latin America and Western Europe, started to remove pre-paid handset subsidies in their markets in 2001.

This meant that they were left with many unsold handsets, as consumers moved to so-called SIM-only purchases, using an old or second-hand phone for a new network connection.

Handset vendors had also shipped too much inventory into the channel at the end of 2000. This saw large amounts of units moved into China and the Asia-Pacific region through gray market sales. Sales of new technologies, such as General Packet Radio Handsets were also slower than expected, taking a major source of top-end growth out of the market.

The only vendor to do spectacularly in the market in the year was South Korean vendor Samsung Corp, which increased sales by 36.8% to sell 28.2 million devices, with a 7.1% global market share, which put it in fourth place, due mainly to its sales of the A300 model phone. Nokia Corp was again in first place, with market share of 35% and sales up 10.5% at 139.7 million.

In second place was Motorola Inc, with market share of 14.8% and sales down 1.7% at 59.1 million, although its global sales were held up by it leading position in the Chinese market. German vendor Siemens AG managed to make the third place for the third time, with 7.4% market share and sales up 10.2% at 29.7 million. In fifth place was Swedish vendor LM Ericsson Telefon AB, with a market share of 6.7%, and sales down 35% at 26.9 million. The remaining players saw sales of 115.9 million units, and a market share of 29% with sales down 15.5%.

With the entry of vendors such as Sanyo Electric Co Ltd, Toshiba Corp and NEC Corp truly moving onto the global stage in the next year, especially with new technologies such as third-generation phones, this could change the market very quickly.

The second wildcard factor is the entry of operators into the markets for handsets of all types. New reference platforms from vendors such as Texas Instruments, Microsoft, Nokia, Ericsson and Motorola could substantially alter the market for named phones.

© Computerwire.com. All rights reserved.