The mobile terminal industry exceeded expectations in the third quarter of 2003, as worldwide mobile phone sales totaled 132.8 million units, a 22% increase from the same period last year, according to Gartner.

"The mobile terminals market is exhibiting extraordinarily strong growth in 2003, and we believe it could reach half a billion units this year," said Ben Wood, principal analyst with the mobile communications group for Gartner in Europe.

The competition among the top tier vendors is heating up, and industry leader Nokia's market share decreased in the third quarter as it faced strong competition from Siemens and Samsung. LG moved into the top five, narrowly pushing Sony Ericsson into the sixth position.

"The market is growing on two fronts - we've hit a sweet spot for replacement sales in mature markets while emerging markets such as Asia/Pacific and Eastern Europe continue to sign up new subscribers at a phenomenal pace," Wood said.

In the mature markets, color mobile terminals are a growing proportion of total sales, with the volume of camera phones also increasing. Gartner analysts said demand for low-cost terminals has also continued.

Worldwide Mobile Terminal Sales to End UsersEstimates for 3Q03
(Thousands of Units)

Company	3Q03 Sales	3Q03 Market Share (%)	3Q02 Sales	3Q02 Market Share (%)

Nokia	45,380.8	34.2	38,575.9	35.5
Motorola	19,484.3	14.7	17,170.1	15.8
Samsung	14,837.4	11.2	11,439.8	10.5
Siemens	12,110.4	9.1	8,081.7	7.4
LG	7,081.9	5.3	4,030.7	3.7
SonyEricsson	7,065.1	5.3	5,100.5	4.7
Others	26,883.8	20.2	24,357.6	22.4

Total Market	132,843.7	100.0	108,756.4	100.0

Note: The table includes sales of Integrated Digital Enhanced Network(iDEN) and wireless local loop terminals. It excludes shipmentsfrom original design manufacturers (ODMs) to OEMs.

The North America market was driven by replacement sales, as users replaced their handsets in favor of new smaller and in many cases, color terminals. With the introduction of mobile number portability on November 24, Gartner analysts believe this will further drive replacement sales for the region.

"The Europe, Middle East and Africa (EMEA) region accounted for 35.5 percent of the world's mobile phone sales, fueled by strong replacement buying in Western Europe," said Carolina Milanesi, industry analyst for the EMEA mobile communications group for Gartner. "This was combined with strong sales in emerging markets such as Eastern Europe, in particular Russia, which saw sales reach 5 million units."

"The Asia/Pacific region bounced back from SARS and was further buoyed by phenomenal growth in India," said Ann Liang, industry analyst with the mobile communications group for Gartner in Asia/Pacific. "Success in China remains crucial in the region with Motorola holding onto the top spot in the face of strong competition from Nokia."

Handset Sales Could Reach Half a Billion Units in 2003 - Report