Gartner: mobile phone sales to resist economic downturn

According to Gartner, global sales of mobile phones surpassed 1.15 billion units in 2007, a 16 percent increase from 2006 sales of 990.9 million.

Carolina Milanesi, research director for mobile devices at Gartner explained that emerging markets contributed to the majority of the growth, while mobile phones with advanced features were the big sellers in mature markets.

“Emerging markets, especially China and India, provided much of the growth as many people bought their first phone,” said Milanesi. “In mature markets, such as Japan and Western Europe, consumers’ appetite for feature-laden phones was met with new models packed with TV tuners, global positioning satellite (GPS) functions, touchscreens and high-resolution cameras.”

Mobile phone sales at the end of 2007 were consistent with the yearly trend, as fourth quarter sales reached 330 million units. Milanesi predicted that the growth rate will decline in 2008 as markets become increasingly saturated.

“After another strong year, we expect the growth in sales of mobile devices to end-users will decelerate in 2008 and fall to about 10 percent growth,” said Milanesi. “However, the global mobile devices market will remain relatively immune to a recession in the US and Western European economies as the majority of growth in 2008 will come from emerging markets.

Milanesi also noted the mature Western Europe and North America markets are driven by operator contract terms and replacement cycles, which will translate into approximately 30 percent of the global mobile device market in 2008.

A Gartner report revealed that Nokia achieved 40 percent market share in the fourth quarter of 2007 when it sold more than 133 million phones globally. Despite some component shortages, the mobile phone vendor increased its market share sequentially in all regions except North America. The analyst firm stated that in emerging markets, consumer demand was focused on products such as the 1110, the 1600 and the 2630, while in mature markets such as Western Europe high-end phones including the N95, N82 and N73 were being purchased.

According to Gartner, Nokia needs to continue to improve its portfolio in 2008, offering not only more applications and functions, but also novel designs and improved user interfaces.

The report also found that in the same period, Samsung maintained second position. Gartner asserted that the vendor relied on its Ultra and Ultra II family of products to widen the gap between it and third-placed Motorola, adding that in 2008 Samsung needs to diversify its portfolio further with more form factors and colours so that single products stand out from the overall line-up.

Milanesi commented that manufacturers needed to keep a close eye on the trends in the mobile phone market in order to meet consumer demand.

“Phone manufacturers need to continuously adapt their portfolios to respond to operators’ demands for open platforms, lower pricing and more personalisation,” recommended Milanesi. “They should also try to meet consumers’ desires for fashionable, easy-to-use phones.”

In APAC, 112 million mobile devices were sold in the fourth quarter of 2007. This represents 9.6 percent growth over the previous quarter, revealed Gartner.
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Driving factors for growth in emerging markets in Asia/Pacific included huge numbers of new subscribers, lower-priced phones based on wideband code division multiple access (WCDMA) technology, as well as ultra-low-cost CDMA phones and low-cost global system for mobile (GSM) phones,” said Ann Liang, principal research analyst for mobile terminals, Gartner.

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