600 million mobiles - Happy Chinese New Year

Replacements, 3G and prezzies keeping handset sales buoyant

Replacements, 3G and prezzies keeping handset sales buoyant

The global mobile market is enjoying healthy growth, despite a Western European market approaching saturation – and if 3G takes off, it looks set to continue, according to analysts.

Research from Gartner shows the number of mobiles sold across the world in the first quarter of this year topped 150 million units – that's year-on-year growth of 34 per cent – and according to the analyst house, sales could be more than 600 million for the year as a whole.

The growth is being led by the Asia Pacific region, particularly phones bought for Chinese New Year, but the Western European market is still holding its own as consumers upgrade old models to camera phones and colour screens.

The upgrade cycle is still looking good for the future, according to Gartner analyst Christina Milanesi, if 3G – or another new technology, such as TV via mobiles - successfully captures the public's imagination.

Nokia continued to lose market share during the quarter, however, dropping by 5.7 percentage points, despite an increase in sales.

The lack of highly desirable clamshell models and weakness in the mid-range of its portfolio aren't helping but Nokia's previous reluctance to kowtow to operators' demands may have enabled other vendors to secure more distribution deals.

"The other vendors are taking advantage of the weakness and taking market share. Motorola is working with operators in Western Europe – they're doing things Nokia [isn't] doing," said Milanesi. And while Nokia's price cuts will no doubt win back some buyers, "they can't keep doing that in the long term" Milanesi added.

Other research from analyst group IDC shows the trend towards upgrading to handsets with mobile internet will be good news for the operators.

IDC predicts that by 2008 there will be 53 millions users visiting mobile portals – contributing to a market that will be worth $2bn.

Operators' efforts in the portal sphere appear to be paying off. Following a slow period in 2002, several operators redesigned their portals or offered a single European site rather than a country-by-country offering.

The importance of country-specific content shouldn't be underestimated, IDC's Mobile Portals in Western Europe: Forecast and Analysis 2003-2008 report says - while the ability to access a recognisable and easy-to-navigate portal from any country might be a bonus for users, operators need to remember one nationality's preference isn't necessarily the same as their next-door neighbours'.