Mobile phone sales post 'healthy' growth

289 million handsets shipped worldwide during the third quarter

Robert Jaques, vnunet.com 31 Oct 2007

The worldwide mobile phone market grew at a "healthy" pace during the third quarter of 2007 with vendors shipping a total of 289.1 million units, according to IDC.

The analyst firm's latest Worldwide Quarterly Mobile Phone Tracker report shows worldwide shipments up nine per cent from the previous quarter and 13.8 per cent from the same quarter a year ago.

Growth was driven by a combination of high-volume shipments of affordable handsets into emerging markets, and high-end feature-packed devices into mature markets.

The leading vendors improved revenues and profits, in some cases building on double-digit operating profit margins as they balanced their product portfolios.

"The worldwide mobile phone market continued to post positive results in the third quarter, even as vendors struggled to balance revenue and profitability," said Ramon Llamas, research analyst with IDC's Mobile Devices Technology and Trends team.

"On the one hand, emerging markets have required vendors to provide low-cost handsets, which boost volume but reduce revenue and sometimes profit per device.

"On the other hand, mature markets have an appetite for higher-end handsets that can generate more revenues and profit.

"The leading vendors have been successful at balancing features and price for the distinct markets in a highly competitive space."

Ryan Reith, senior research analyst for IDC's Mobile Phone Tracker, added: " Growth in the overall mobile device industry has slowed over the past few quarters.

"But the converged mobile device segment continues to grow several times faster than traditional phones, and accelerated to more than 50 per cent year-on-year growth in the third quarter.

"A wide selection of devices, combined with declining initial price points, have made this segment of the market an immense growth opportunity for manufacturers.

"At the same time, this space is attractive for the operators because these devices are often bundled with a data plan which means increased revenue per user."

Nokia posted its second consecutive quarter of 100-plus million units, and shipped more units than the next three vendors combined.

This accomplishment emphasises Nokia's size, but was described by IDC as " notable" since the company has been handicapped by component shortages.

Samsung marked its second consecutive appearance in the number two spot worldwide, while Motorola kept the number three spot for the quarter and emerged as the only leading vendor to post a negative year-over-year shipment delta.

Sony Ericsson held onto fourth place for the sixth consecutive quarter, and continued its string of quarterly double-digit operating profit margins while more aggressively building its presence within emerging markets.

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