Mobile phone sales way up; Nokia down

Global mobile-phone sales increased 34 percent in the first quarter of the year, as a surprising number of people choose to upgrade to flashy phones with built-in cameras and colour screens, a market-research firm said Tuesday.

Consumers bought a record 153 million phones, as sales increased in all regions of the world when compared with the same period a year ago, Gartner said. Based on the latest results, people worldwide are expected to buy more than 600 million handsets by the end of the year.

In general, sales were boosted by purchases for the Chinese New Year in the Asia/Pacific market, healthy growth in emerging markets, and “surprising numbers” of people in mature markets choosing to upgrade their phones, Gartner analyst Ben Wood said.

Increased sales in the quarter, however, failed to help market leader Nokia, which suffered a dramatic drop in market share. The Finnish company fell to 28.9 percent of the market, from 34.6 percent a year ago. Second-place Motorola, meanwhile, rebounded after successive disappointing quarters, boosting its market share to 16.4 percent, from 14.7 percent.

Nokia lost market share because of a sales drop in Western Europe and North America. A weak product portfolio and European carriers offering more phones from Nokia's competitors led to the disappointing performance, Wood said.

Motorola, on the other hand, rebounded from particularly robust sales in Western Europe, which were driven by the popularity of its new products, Wood said.

US-based, Motorola, however, can't rest on its laurels, and needs to get new products out on time in the second half of the year to beat back recent price cuts by Nokia, which takes a more flexible approach in working with operators, Wood said.

Third-place Samsung upped its market share to 12.5 percent, from 10.8 percent a year ago, by adding lower-cost phones to its portfolio. In addition, the Korean handset maker sold phones supporting multiple network technologies, including GSM, CDMA, and TDMA.

Rounding out the top five vendors were Siemens and Sony Ericsson. Both companies increased market share by less than a percent to 8 percent and 5.6 percent, respectively.

Regionally, Western Europeans took advantage of continued Christmas sales promotions in replacing their old phones in the first quarter. Gartner expected replacement sales to continue rising in the second half of the year, due to the recent launch of high-speed services from Vodafone, T-Mobile, and Telecom Italia Mobile (TIM).

In North America, sales grew by 30 percent, driven by consumer attraction to new colour phones and handsets with built-in cameras, Gartner said. In Asia/Pacific, sales were strong in Australia, China, India, and Thailand. In Japan, consumers bought more than 11 million units.