Global Handset Sales Seen Rising To 730 Million In 05-Gartner

BERLIN -(Dow Jones)- Momentum in the global handset market is expected to continue into 2005 after growth last year exceeded even the most optimistic forecasts, technology research company Gartner Inc. (IT) said Wednesday.

Handset sales will exceed 730 million units in 2005, after growing 30% to 674 million in 2004.

"In mature markets, it remains to be seen whether the record breaking levels of replacement sales can be sustained" in 2005, Hugues De La Vergne, an analyst at Gartner, said in a statement. "In emerging markets the major battle ground in 2005 will be the sub-$50 handset arena."

In the fourth quarter, sales of mobile phones rose 24% to 195.3 million, with Motorola Inc. (MOT) and Samsung Electronics Co. (005930.SE) gaining market share at the expense of Nokia Corp. (NOK) and Siemens AG (SI).

Motorola regained second position from Samsung with higher-than-expected growth, Gartner said. Motorola's market share increased to 16.3% in the three months through December.

The U.S. company has enjoyed success with the RAZR V3, an ultra-thin handset with metal finish that has helped lead sales in Europe and North America. Sales were further buoyed by aggressive pricing in emerging markets such as Latin America and the Asia Pacific region, Gartner said.

At the recent mobile conference in Cannes, Motorola was selected by the GSM Association, an industry body, to supply $40 handsets aimed at emerging markets.

Samsung boosted awareness of its brand in 2004, particularly in China, and developed market leadership in multi-mega pixel camera phones. Its share of the global market reached 12.2% in the fourth quarter.

The South Korean company needs to expand its product portfolio into the high volume, lower margin segment to challenge Nokia and Motorola, Gartner said.

Nokia, which was caught off guard early in 2004 by a raft of more attractive phones from its rivals, managed to stabilize its market share at the end of 2004, with 33.0% in the final quarter.

The Finnish manufacturer's "broad portfolio of devices, combined with its profitable high volume low-tier products, will help sustain this position in 2005, but it must regain the initiative in terms of brand and technology leadership in the face of strong competition from the other top five vendors," Gartner analyst Ben Wood said.

Siemens, which is struggling to come up with a strategy for its unprofitable handset business, lost the number four spot to LG Electronics Inc. (066570.SE) in the fourth quarter.

The German vendor suffered a major setback at the end of last year when a software glitch was discovered in a new range of phones. Executives have said the options for the business include a sale, restructuring or closure.

2 Mar 2005 13:42 GMT Global Handset Sales Seen Rising To 730 Million In 05-Gartner -3

Following is a table of the worldwide mobile terminal sales to end-users as provided by Gartner:

 
Units (thousands) 
Company        4Q 2004       4Q 2003 
 
Nokia           64,387        54,582 
Motorola        31,744        22,255 
Samsung         23,884        15,525 
LG              13,341         8,727 
Siemens         12,589        14,907 
Sony Ericsson   12,336         7,966 
Others          37,040        33,324 
Total Market   195,321       157,285 
 
Market Share 
Company        4Q 2004       4Q 2003 
 
Nokia            33.0%         34.7% 
Motorola         16.3%         14.1% 
Samsung          12.2%          9.9% 
LG                6.8%          5.5% 
Siemens           6.4%          9.5% 
Sony Ericsson     6.3%          5.1% 
Others           19.0%         21.2% 

Company Web site: http://www.gartner.com

-By Taska Manzaroli, Dow Jones Newswires; 49 30 2888 410; taska.manzaroli@dowjones.com

(END) Dow Jones Newswires "

Posted to the site on 2nd March 2005