Cell phone fervor slows

Nokia's share of market slips as once-roaring growth in sales comes back to earth, Strategy Analytics says.

Ben Charny Staff Writer, CNET News.com
Ben Charny
covers Net telephony and the cellular industry.
Ben Charny
Slow cell phone subscriber growth, particularly in emerging markets in the Americas and Asia, has diminished worldwide demand for wireless handsets, analysts at Strategy Analytics reported Wednesday.

Report author Neil Mawston said the slowdown is due in part to less robust economic conditions worldwide. In addition, consumers are all but done upgrading from monochrome to color screen models, a major reason for flourishing phone sales in recent years, he said.

During the first three months of the year, Strategy Analytics reported, 172 million handsets shipped. While that's a 10 percent increase from the previous quarter, the sales increase during the same period last year was 44 percent.

The report is another indication that the once-hot cell phone market has begun a slow descent. The slowdown, which began in the first part of 2004, promises to heighten competition among handset makers and wireless operators.

"Demand is moderating in all regions," Mawston said.

The world's leading cell phone manufacturer remained Finnish giant Nokia during the first quarter, but its share of the market slipped about 2 percent to about 31.3 percent. Making gains on Nokia's still considerable lead were No. 2 handset maker Motorola and, most notably, Samsung, which exploited its strength in Asia to jump from a 10 percent to 14 percent share, the analysts said.