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Gartner: Handsets to pull in strong sales

The cell phone sector is poised to do well again this year, following healthy growth in 2003 that was driven by emerging markets such as China and India, the market research firm says.

Coming off vigorous growth in 2003, mobile phone sales are poised for a continuing surge this year, market researcher Gartner said on Wednesday.

In 2003, worldwide mobile phone sales totaled 520 million units, an increase of 20.5 percent over the previous year. That jump was driven by purchases in emerging markets such as China and India, as well as by replacement demand in more mature markets.

Cellular standings
In 2003, Nokia accounted for more than one-third of handset shipments worldwide.
Company Units
share (%)
Nokia 180.7 34.7
Motorola 75.2 14.5
Samsung 54.5 10.5
Siemens 43.8 8.4
Sony Ericsson 26.7 5.1
Source: Gartner

The first quarter of 2004 is already looking strong, setting the stage for a full-year total of 580 million units, Gartner said. That figure is in line with a forecast of 585 million units from another market watcher, Strategic Analytics.

Nokia remained on top of the market in 2003, though its share declined marginally to 34.7 percent from 35.1 percent in the preceding year, mainly as a result of loss of share in Western Europe and growing competition from smaller players in the Asia-Pacific region.

The Finnish phone maker also became the market leader in North America, displacing Motorola, which saw its share decline in the last quarter of the year. Motorola paid heavily for a lack of timely delivery of some products in the CDMA (code division multiple access) segment, Gartner said. However, the U.S. company, which finished 2003 with a worldwide market share of 14.5 percent, shows signs of regaining lost ground in 2004.

Samsung held onto third place worldwide in 2003 with a market share of about 10 percent, and its focus on high-end products meant higher average selling prices and double-digit profit margins. In contrast, No. 4 Siemens focused on low-cost and low-margin products, but made strong gains in the third and fourth quarters in emerging markets in Eastern Europe. Sony Ericsson Mobile Communications rounded out the top five.

"The Asia/Pacific market remained strong in the fourth quarter, fully recovering from the impact of SARS earlier in the year," Ann Liang, an analyst for Gartner, said in a statement. "The vendor competition in China remained as fierce as ever as local vendors fought for market share, while the market continued to surge in India."