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News Article

Nokia loses market share as handset sales soar

Gartner predicts handset sales to reach 600 million units this year as Nokia's share of the worldwide market drops below 30%.

Worldwide sales of cell phone handsets totaled 153 million units in the first quarter of 2004, according to the market research firm Gartner.

The figure represents a 34% increase on the first quarter of 2003. As a result, Gartner has forecast that sales will exceed 600 million units in 2004.

"Another record quarter of mobile phone sales resulted from an Asia/Pacific market buoyed by purchases for the Chinese New Year, healthy growth in emerging markets and surprising numbers of people in mature markets choosing to upgrade their phones," said Ben Wood, principal analyst at Gartner.

Although each of the top five vendors - Nokia, Motorola, Samsung, Siemens and Sony Ericsson - saw an increase in sales, Nokia s share of the overall market dropped markedly.

The Finnish company s global market share plummeted by over 5% to 28.9%, although it remains the clear market leader.

"Nokia s dramatic drop in market share resulted from a weak product portfolio and the decision by operators in Europe to source more phones from Nokia s competitors," explained Wood.

Nokia itself estimated that it had sold 44.7 million handsets from a first quarter total of 141 million, giving it a 31.7% market share. The company also projected that total sales for 2004 would exceed 600 million units.

Nokia s loss was shared evenly out among its competitors, each of which recorded an increase in market share of less than 2%.

Motorola, with a market share of 25%, saw robust sales in western Europe, a region where Gartner expects demand for third-generation phones to rise in the second half of this year as operators begin to roll out enhanced services.

Samsung said that it shipped just over 20 million phones in the first quarter, slightly more than Gartner s estimate of 19.1 million.

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