Motorola tipped to pass Nokia as handset sales surge

Stuart Corner
Sunday, 23 July 2006 12:31

IT Industry - Strategy

Global mobile phone shipments grew a healthy 26 percent year-over-year, to reach 235 million units in Q2 2006, according to the latest research from Strategy Analytics.
Rival research firm, IDC, put the figure at 237.8 million and growth at 22.5 percent but rejected the possibility of 2006 become the first billion handset year, as many have predicted.

Nokia and Motorola dominated sales and accounted for a record 55 percent combined share during the quarter. According to Neil Mawston, associate director of the Wireless Device Strategies (WDS) service at Strategy Analytics "Motorola has recorded an average 52 percent annual growth over the last four quarters, while Nokia has averaged 32 percent. If Motorola can continue this breakneck pace - a stretch, but not totally inconceivable given the strength of their core designs - it would overtake Nokia in the first half of 2007. Nokia's market share is 50 percent above Motorola's: about 31 percent of the total compared to Motorola's 22 percent.

The market share gap between Motorola and Samsung (11 percent) opened to its widest point since 1999, as Samsung continued to miss out on the boom in emerging SM markets.

"The stars would need to align for Motorola on additional new products, 3G, and component supply, but this should be a strong warning for Nokia which should feel pressure to more rapidly improve both entry- and mid-tier product offerings in terms of both designs and numbers," Mawston said.

Strategy Analytics identifies Sony Ericsson - which jumped back into fourth position for the first time in two years as demand surged for its Walkman music phones - as another vendor that has achieved both balanced product design and brand relevance with its Walkman products, resulting in record highs for the joint venture in shipments, revenues and profits. "The important story for Sony Ericsson is the notable improvements in getting new products out and into channel on time - and profitably. If Sony Ericsson can continue in this area, where it has struggled in the past, the Walkman and Cybershot brands from Sony have legs to provide strong growth well into 1H 2007."