Business

Motorola Gaining Share of Mobile Phone Sales

Mobile handset maker Motorola has jumped into second place worldwide and is gaining ground on many of its rivals as the market for mobile phones continues to expand rapidly to record sales volume.

A report from Gartner says that a surge of sales in the fourth quarter, when sales jumped 24 percent, helped the mobile phone market achieve 30 percent growth in 2004.

Gartner said that Motorola regained its second place position ahead of now third place Samsung in the fourth quarter as it outpaced almost all growth projections. Nokia retained the overall lead in what is becoming a viciously competitive marketplace from both a price and product offering standpoint.

Dramatic Turnaround

Gartner principal analyst Ben Wood said emerging markets are just one driving factor behind the expansion, which outpaced Gartner’s forecasts heading into 2004.

Wood told the E-Commerce Times that Motorola experienced a dramatic turnaround in 2004 as it revamped its product line and rolled out new, highly sought-after models.

Motorola grew by targeting affluent markets with its RAZR phone and by offering lower-cost phones in emerging markets, Wood said. “It’s been an effective strategy that’s exposed it to growth opportunities,” he added.

Wood said Nokia has stopped its market share losses but needs to “regain the initiative in terms of brand and technology leadership in the face of strong competition” in order to avoid seeing further slippage in 2005.

Nokia recently announced it would roll out new phones meant to offer the capabilities of high-end MP3 players and joined a host of other handset makers in promising new smartphone lines to take advantage of emerging 3G networks.

Geographic Patterns

At the end of the year, Nokia had 34.8 percent of the worldwide market, Motorola had 15.4 percent and Samsung, 12.3 percent. Siemens, with 8.7 percent, and Sony Ericcsson, with 6.2 percent market share, rounded out the top five.

Growth patterns were dictated largely by geography. New phone sales were high in Europe during the Christmas season, while replacement sales and giveaways by mobile carriers drove unit counts in North America.

Emerging markets will likely become more important going forward for growth prospects, which is why many companies have positioned themselves to sell more product in China and in Latin America.

Wood said the momentum will continue into 2005, with sales expected to expand to 730 million units, but that more challenges will also emerge for the sector.

In North America and Europe, recent replacement sale rates will be hard to sustain and in emerging markets, handset makers will face pressure to develop feature-rich phones that retail for less than US$50, with competition from Chinese companies and others, according to Hugues De La Vergne, another Gartner analyst.

Slow M-Commerce Boost

Meanwhile, handset makers should not expect to get a significant boost from emerging technologies such as streaming media or mobile-commerce — at least not yet, Wood said. Even though smartphone growth is crushing the PDA market and mobile gaming and other platforms are selling well, the necessary technology evolution is taking place slowly.

While handset makers are ready to crank out 3G-enabled devices that can do everything from download and store music to play streaming video and surf the Web, most parts of the U.S. still lack the networks necessary to support those services. “That will develop over a longer time horizon,” Wood said.

Leave a Comment

Please sign in to post or reply to a comment. New users create a free account.

Related Stories
More by Keith Regan
More in Business

How often do you receive an email that you suspect is fraudulent?
Loading ... Loading ...

Technewsworld Channels