Mobile industry 'back on track'

Research shows that the mobile phone market is recovering from its two-year slump, in the latest positive sign for the IT industry
Written by Matthew Broersma, Contributor
The global mobile phone market showed significant growth for the second quarter of 2003, and is on track to emerge from two years of stagnation, according to sales figures released this week by analyst Gartner.

Worldwide mobile phone sales hit 114.9 million units for the second quarter, 12 percent up on a year ago and 2 percent up from the first quarter of 2003, according to Gartner. The mobile phone industry, along with the rest of the IT sector, has seen growth fall off since the boom of the late 1990s, but the market is now on track to achieve "strong growth" for 2003, Gartner said.

In Europe and North America, most consumers already own basic mobile phones, and sales are driven by upgrades to flashier handset models with features such as colour screens, cameras and games. But slower growth in these areas was offset by sales in Japan, Latin America, Central and Eastern Europe, the Middle East and Africa, which "far exceeded expectations", according to analyst Bryan Prohm.

"The global market is now clearly split into two mature markets," said analyst Ben Wood, in a statement. "There is the replacement market in regions such as Western Europe and North America that is driving sales, and emerging markets such as Africa, parts of Eastern Europe and China, where new sales are fuelling customer demand."

Nokia still dominates the global market, with 35.9 percent of sales -- 17.3 percent up on a year ago due to success in the North American CDMA market and emerging areas such as Asia/Pacific and Eastern Europe. Motorola, the world's second-largest handset maker, was hit by the Sars outbreak in the spring, and saw its market share drop by 4 percent to 14.6 percent.

Samsung, the third-biggest company, saw 16.1 percent year-on-year growth. Sony Ericsson, which has struggled to increase market share since the merger of Sony's and Ericsson's handset units, saw sales grow 17.8 percent due to Japanese sales and the successful introduction of the T610 handset in Europe, Gartner said.

Researchers have shown optimism about the mobile phone industry recently. IDC this week said it expects handset shipments to total 460 million units this year, rising to more than 500 million next year; an 8 percent year-on-year increase.

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