3G handsets drive European market


location based services

The Western european market grew in Q1 by 11 percent year on year to reach 40.7 million units, according to IDC’s Western European Quarterly Mobile Devices Market Tracker.

”Mounting consumer migration towards WCDMA devices driven by competitive service pricing and ASP declines, combined with highly aggressive handset subsidies across operator portfolios, was a key market performance driver in 1Q06,” said Geoff Blaber, senior research analyst, European Mobile Devices at IDC.

However, despite relatively healthy unit volumes, intense vendor competition, ASP declines, and sustained scrutiny of handset portfolios and costs by mobile operators continued to have a negative impact on vendor profit margins.

Downsizing of portfolios meant the top 3 vendors accounted for almost 70 percent of all traditional mobile phones shipped, compared to 62 percent in 2005.

With increased carrier demand for highly customizable devices and higher ARPU (average revenue per user) driving solutions meant that converged devices increased their proportion of the total market to 7 percent in 1Q06 from 5 percent in the opening quarter of 2005 as consumers continued to migrate predominantly towards S60 devices from high-end feature phones.

Growth continues

”Strong anticipated converged device growth in both consumer and enterprise segments, combined with the introduction of new form factors and technology improvements, particularly with regard to imaging, will drive a healthy renewal market in 2006,” said Jean-Philippe Bouchard, senior research analyst, European Mobile Devices at IDC.

“Consequently, IDC forecasts total mobile phone market growth of just under 10 percent with shipments expected to exceed 185 million units.”

Western European mobile phone shipments, 1Q06
Vendor Q1 06, millions Share 1Q05, millions Osuus,1Q 06,% Growth
Nokia 13,8 34 % 11,8 32 % 17 %
Motorola 7,3 18 % 5 14 % 44 %
Samsung 7,1 17 % 6 16 % 19 %
Sony Ericsson 3,7 9 % 3 8 % 24 %
BenQSiemens 2,4 6 % 2,9 8 % -16 %
Muut 6,3 16 % 8,1 22 % -22 %
Yhteensä 40.7 100 % 36,8 100 % 11 %
Source: IDC

Best performers, 1Q06

Nokia - The Finnish vendor extended its market leadership, shipping a total of 13.9 million handsets in this year’s first quarter, representing year-on-year growth of 17 percent and consolidating a market share of 34 percent. The 6230i and WCDMA 6280 were key contributors to shipments over the period and ASPs increased sequentially to EUR103 in contrast to the overall market trend.

Motorola - Motorola witnessed the most substantial year-on-year growth of all top 5 vendors in this year’s first quarter, with shipments increasing by 44 percent and market share rising to 18 percent from 14 percent in the corresponding quarter of 2005. Despite additions to its feature phone lineup such as the PEBL and SLVR in 4Q05, the RAZR continued to drive shipments, meaning the handset has far exceeded average market life cycles.

Samsung - A year-on-year increase in shipments of 19 percent served to increase Samsung’s market share to 17 percent. The vendor’s mid to high-end handset lineup continued to expand in the first quarter as the Samsung portfolio steadily moves towards a wider range of higher-specification feature phones. The D600 and Z510 proved to be key factors in Samsung’s growth.

Sony Ericsson - Sony Ericsson recorded another strong quarter with positive year-on-year growth of 24 percent and market share growing from 8 percent in the first quarter of 2005 to 9 percent in 2006. This is indicative of Sony Ericsson’s development of its high-end portfolio with a focus on imaging, music, and 3G, with the K750i and extensive Walkman range witnessing substantial traction and the K600 series pushing WCDMA into the mass market by lowering BOM costs and price points.

BenQ Siemens - Shipments reached 2.4 million units in the first quarter, compared to 2.9 million units shipped in 1Q05 under the Siemens brand. Although 1Q06 was a transition period for BenQ Siemens as it seeks to reestablish itself in operator portfolios with a high-end product mix, the launch of its two first handsets in the quarter, the EF81 and S88, as well as the clearance of remaining Siemens brand inventory, will enable the vendor to grow unit volumes and seek a return to profitability by the timetabled yearend.

Related News

Nokia slams phone subsidies
VoWLAN drives convergence
Western Europe mobile phone market to grow 11% in 2005
Nokia keeps 35% share of Western Europe
Samsung, Sony Ericsson post declines
Gartner puts 2004 end user sales at 674 million