Quarterly Handset Sales Report

In its quarterly report, Strategy Analytics reports that the first quarter of 2003 saw encouraging signs of growth in cellular handset sales, as both demand and sell-in growth was strong in major regions.

GSM shipments grew 13% and Nokia reaped the benefits. Nokia total shipments grew 18% with a strong GSM performance, while expanding profits nearly two percentage points year on year in an increasingly cost competitive global GSM market. CDMA shipments grew 49% year over year on strength in the Americas markets. Benefiting from this growth were Korean CDMA vendors Samsung Electronics and LG Electronics. LG recorded 81% shipment growth and revenues grew 41%.

"Shipment growth does not equal profitability," states Chris Ambrosio, Director of the Wireless Device Strategies Service at Strategy Analytics. "With the exception of Nokia, vendor profits were flat or declining. Shipment growth for the top 6 vendors was slightly faster than the market rate at just under 19 percent, but profits grew only 3 percent. Vendors still have a long way to go in improving internal efficiencies, and in developing and commercializing diverse handset portfolios."

LG moved past Sony-Ericsson in both revenues and shipments. Strong exchange rates on the Euro prevented LG from exceeding Siemens in total revenues however. Kyocera Wireless saw its shipments surge 51% year on year on CDMA shipments into North America and China.

Strategy Analytics maintains its projection of 455 million units sell-in in 2003. The strong Q1 performance is impacted by Asia-Pacific first quarter holiday season sell-in, and expects that this Q1 surge will become a seasonal trend as sales growth in China becomes a larger part of global sell-in.

Commenting on LG's recent surge, "It's great to see a company grow to meet the needs of the market through both leading- edge handsets and strategic promotions," said Chris Ambrosio, director in the Global Wireless Practice at Strategy Analytics. "With its reputation as a CDMA handset innovator, we were not surprised to see how quickly LG Mobile Phones took hold of this highly competitive market since its entry into the U.S. in 1998. With the launch of GSM handsets later this year, LG will be able to leverage this same innovation strategy in a GSM market that is badly in need of devices with feature and design diversity. This expansion coupled with continued CDMA success paves the road to long-term volume growth for LG."

Posted to the site on 2nd June 2003