Market researchers report on Q1 08 cellphone shipments

Shipments of mobile phones increased by about 14 percent in Q1 08 year-on-year, according to market research groups Strategy Analytics and IDC, but both note that this represents a decrease from the previous quarter.

Q1 performance
According to Strategy Analytics Inc., 282 million cellphones were shipped worldwide in Q1 08, up a healthy 14 percent year-on-year. Demand remained strong in emerging markets, particularly Africa and Asia.

Korean vendors LG Electronics and Samsung Electronics were said to be the star performers, growing two to four times faster than the industry average. Nokia Corp. maintained a commanding 41 percent share, but weakness in North America and in smartphones is causing concern.

Motorola Inc. slumped and is in real danger of being overtaken by LG. Sony Ericsson's growth came to a grinding halt, due to sub-brand fatigue. And Apple Inc. saw its global handset market share slip to 0.6 percent.

Meanwhile IDC suggests 291 million phones were shipped in Q1 08, up 14.3 percent on the same period last year but down 11.6 percent from the 255 million shipped in Q1 08.

Both groups agree about the top five vendors, with only minor differences in market shares or year-on-year growth.

Q2 forecast
Strategy Analytics forecasts 280 million units will be shipped in the second quarter, up 12 percent on Q2 07, and suggests moderate inventory-build in North America and slower seasonality in Asia would drive a slightly slower growth rate than the previous quarter.

IDC did not provide a forecast but said "concerns over the economy may negatively impact handset purchases as the year progresses."

According to Strategy Analytics, Nokia registered a 41 percent global share for the second consecutive quarter in Q1 08, shipping 115.5 million phones. Samsung had a 16.4 percent share, Motorola 9.7 percent, LG 8.6 percent and Sony Ericsson 7.9 percent.

Motorola's showing meager
IDC notes that year-on-year, Nokia increased shipments by 26.8 percent, Samsung by 33 percent, LG Electronics by 54.4 percent and Sony Ericsson by 2.3 percent. Motorola saw a 39.7 decrease in the number of phones it shipped between Q1 08 and Q1 07.

Strategy Analytics estimated that Nokia's global market share in the smartphones sector dropped from 50 percent in Q1 07 to 44 percent in Q1 08. Rivals such as Research in Motion Ltd (RIM) and Samsung are said to be turning up the competitive heat, while some new Nseries and Eseries models have seen lackluster demand.

It said Motorola's slump means it is "in real danger of being overtaken by LG in the second quarter. Its decline in shipments during Q1 08, particularly in North America, has been accelerating, not slowing.

Strategy Analytics laments Motorola's 10 percent global market share is "at the lowest level since our records began," and adds an operating loss in the handset division of minus 12 percent is the largest recorded by the company since Q1 01.

Motorola's unexciting handset portfolio across all tiers remains the core problem "and any signs of it being fixed in the near-term appear slim."

Sony Ericsson's upward run has come to a grinding halt, the market research group added. Annual shipment growth has plunged from 64 percent to 2 percent in just twelve months.

LG star rising
Strategy Analytics said LG was the star performer during Q1 08. It sold 24 million units worldwide and grew almost four times faster than the industry average. LG has overtaken Sony Ericsson and it stands a good chance of catching Motorola in 3rd position.

Below the top 5 megavendors, Apple showed signs of weakness. Following three consecutive quarters of growth, its global market share fell by a tenth of a percentage point for the first time, from 0.7 percent in Q4 07.

Strategy Analytics estimates Apple shipped 1.7 million iPhones worldwide in Q1 08, down sharply from 2.3 million in Q4 07. "We believe stock-outs in North America and sluggish demand in Western Europe due to high pricing have been the main causes behind Apple's weakness. The upcoming launch of the 3G iPhone in June 2008 is sorely needed and Apple must not repeat the mistake of overpricing its new, second-generation device."

- John Walko
EE Times Europe