Nokia, Motorola Widen Lead on Record Handset Sales (Update2)
Nokia Oyj and Motorola Inc. widened their lead over Samsung Electronics Co. on increased sales of cheap mobile phones in Asia, according to a Gartner Inc. report.
Nokia, the world's biggest maker of mobile phones, increased its market share to 36.2 percent from 35 percent a year earlier, the Stamford, Connecticut-based research company said in a statement today. Second-ranked Motorola's share rose to 21.5 percent from 17.8 percent, while Samsung, the third- largest manufacturer, fell to 11.3 percent from 12.1 percent.
Motorola and Nokia are focusing on markets such as China and India to boost sales of low-cost handsets in rural areas, as well as high-speed, or 3G, models that allow users to surf the Internet and make video calls. China is the world's largest mobile-phone market by users, while India is the fastest growing, adding more than 6 million customers a month.
```Nokia's brand is the most valuable in the emerging markets,'' said Karri Rinta, an analyst at Handelsbanken Capital Markets in Helsinki. ``Motorola has kept its share in China and is targeting India.''
Gartner predicted global handset sales of about 1.2 billion units this year after shipments soared 21 percent last year, bolstered by markets like China and India.
Espoo, Finland-based Nokia and Schaumburg, Illinois-based Motorola also increased their market shares sequentially and for the full-year as did Sony Ericsson Mobile Communications Ltd.
``Overall, you see Nokia, Motorola, winning more market share,'' Carolina Milanesi, principal research analyst at Gartner, said in an interview. ``These two players are present in all regions, price points and technologies.''
Asia-Pacific
Fourth-quarter unit sales climbed 21 percent to 284.2 million units, led by a 56 percent jump in the Asia-Pacific region, Gartner said. In 2006, shipments amounted to 990.8 million devices, an all-time high. Nokia benefited from having the widest portfolio even as it has been criticized for its mid- tier range, Milanesi said.
Nokia in January predicted industry handset sales to rise as much as 10 percent this year from 978 million units sold in 2006. Milanesi said in a ``worse-case scenario'' the industry would sell 1.1 billion devices. Researcher Strategy Analytics Ltd. last month estimated the market to reach 1.14 billion units, up 12 percent.
Shares in Nokia, whose own market share forecast for the fourth quarter was in line with Gartner's, gained 22 cents, or 1.4 percent, to 16.40 euros as of 11:26 a.m. in Helsinki, while Ericsson AB, which owns half of Sony Ericsson, rose 0.2 krona, or 0.8 percent, to 24.80 kronor in Stockholm. Motorola gained 31 cents to $18.83 in New York yesterday.
Profit Margin
Nokia and Motorola have introduced new handsets aimed at winning market share in each others' strongholds. While Nokia has focused on slimmer models, its U.S. rival has concentrated on multimedia devices with music players and cameras.
Motorola's profit margin at its phone unit shrank to 4.4 percent of sales in the fourth quarter from almost 12 percent in the previous three months as it cut prices to challenge Nokia's lead in emerging markets. Profit margin at Nokia's Mobile Phone division, its largest unit, climbed to 17.8 percent from 15.3 percent, excluding one-time items.
Milanesi said Motorola ``lost steam'' in the latter half of 2006 and it faces a ``challenging'' start for this year after Ron Garriques, head of its mobile-phone unit, left the company.
Sony Ericsson
Sony Ericsson, which overtook LG Electronics Inc. as the fourth largest handset maker in the first quarter, boosted its share to 9 percent from 6.9 percent a year earlier. The London- based joint venture between Japan's Sony Corp. and Ericsson AB of Sweden has attracted consumers with high-resolution cameras on its phones and handsets that use Sony's Walkman brand and double as music players.
``It's a safe portfolio, we would like them to diversify,'' Milanesi said. The company may continue to increase its market share in the short-term, she said.
Market share at Samsung fell in the quarter from the year- earlier period and sequentially, as sales growth at the Suwon, South Korea-based company rose at a slower pace than the market.
Milanesi said the company has focused more on new technologies to please phone companies at the expense of end users.
The following is a table of the six biggest handset makers by unit shipments and market share in the fourth quarter of 2006, with comparisons from a year earlier and the previous quarter. The figures were compiled by Gartner.
Units Q4'06 Share Q4'06 Units Q4'05 Share Q4'05
(millions) (percent) (millions) (percent)
Nokia 102.8 36.2 82.2 35.0
Motorola 61.0 21.5 41.9 17.8
Samsung 32.0 11.3 28.4 12.1
Sony Ericsson 25.7 9.0 16.1 6.9
LG 17.8 6.3 16.9 7.2
Sagem 4.4 1.5 4.2 1.8
Others 40.5 14.2 45.4 19.2
Total 284.2 100.0 235.1 100.0
Units Q3'06 Share Q3'06
(millions) (percent)
Nokia 88.1 35.1
Motorola 52.0 20.7
Samsung 30.6 12.2
Sony Ericsson 19.5 7.8
LG 15.0 6.0
Sagem 4.0 1.6
Others 41.8 16.6
Total 251.3 100.0
To contact the reporter on this story: Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net .
Nokia Oyj and Motorola Inc. widened their lead over Samsung Electronics Co. on increased sales of cheap mobile phones in Asia, according to a Gartner Inc. report.
Nokia, the world's biggest maker of mobile phones, increased its market share to 36.2 percent from 35 percent a year earlier, the Stamford, Connecticut-based research company said in a statement today. Second-ranked Motorola's share rose to 21.5 percent from 17.8 percent, while Samsung, the third- largest manufacturer, fell to 11.3 percent from 12.1 percent.
Motorola and Nokia are focusing on markets such as China and India to boost sales of low-cost handsets in rural areas, as well as high-speed, or 3G, models that allow users to surf the Internet and make video calls. China is the world's largest mobile-phone market by users, while India is the fastest growing, adding more than 6 million customers a month.
```Nokia's brand is the most valuable in the emerging markets,'' said Karri Rinta, an analyst at Handelsbanken Capital Markets in Helsinki. ``Motorola has kept its share in China and is targeting India.''
Gartner predicted global handset sales of about 1.2 billion units this year after shipments soared 21 percent last year, bolstered by markets like China and India.
Espoo, Finland-based Nokia and Schaumburg, Illinois-based Motorola also increased their market shares sequentially and for the full-year as did Sony Ericsson Mobile Communications Ltd.
``Overall, you see Nokia, Motorola, winning more market share,'' Carolina Milanesi, principal research analyst at Gartner, said in an interview. ``These two players are present in all regions, price points and technologies.''
Asia-Pacific
Fourth-quarter unit sales climbed 21 percent to 284.2 million units, led by a 56 percent jump in the Asia-Pacific region, Gartner said. In 2006, shipments amounted to 990.8 million devices, an all-time high. Nokia benefited from having the widest portfolio even as it has been criticized for its mid- tier range, Milanesi said.
Nokia in January predicted industry handset sales to rise as much as 10 percent this year from 978 million units sold in 2006. Milanesi said in a ``worse-case scenario'' the industry would sell 1.1 billion devices. Researcher Strategy Analytics Ltd. last month estimated the market to reach 1.14 billion units, up 12 percent.
Shares in Nokia, whose own market share forecast for the fourth quarter was in line with Gartner's, gained 22 cents, or 1.4 percent, to 16.40 euros as of 11:26 a.m. in Helsinki, while Ericsson AB, which owns half of Sony Ericsson, rose 0.2 krona, or 0.8 percent, to 24.80 kronor in Stockholm. Motorola gained 31 cents to $18.83 in New York yesterday.
Profit Margin
Nokia and Motorola have introduced new handsets aimed at winning market share in each others' strongholds. While Nokia has focused on slimmer models, its U.S. rival has concentrated on multimedia devices with music players and cameras.
Motorola's profit margin at its phone unit shrank to 4.4 percent of sales in the fourth quarter from almost 12 percent in the previous three months as it cut prices to challenge Nokia's lead in emerging markets. Profit margin at Nokia's Mobile Phone division, its largest unit, climbed to 17.8 percent from 15.3 percent, excluding one-time items.
Milanesi said Motorola ``lost steam'' in the latter half of 2006 and it faces a ``challenging'' start for this year after Ron Garriques, head of its mobile-phone unit, left the company.
Sony Ericsson
Sony Ericsson, which overtook LG Electronics Inc. as the fourth largest handset maker in the first quarter, boosted its share to 9 percent from 6.9 percent a year earlier. The London- based joint venture between Japan's Sony Corp. and Ericsson AB of Sweden has attracted consumers with high-resolution cameras on its phones and handsets that use Sony's Walkman brand and double as music players.
``It's a safe portfolio, we would like them to diversify,'' Milanesi said. The company may continue to increase its market share in the short-term, she said.
Market share at Samsung fell in the quarter from the year- earlier period and sequentially, as sales growth at the Suwon, South Korea-based company rose at a slower pace than the market.
Milanesi said the company has focused more on new technologies to please phone companies at the expense of end users.
The following is a table of the six biggest handset makers by unit shipments and market share in the fourth quarter of 2006, with comparisons from a year earlier and the previous quarter. The figures were compiled by Gartner.
Units Q4'06 Share Q4'06 Units Q4'05 Share Q4'05
(millions) (percent) (millions) (percent)
Nokia 102.8 36.2 82.2 35.0
Motorola 61.0 21.5 41.9 17.8
Samsung 32.0 11.3 28.4 12.1
Sony Ericsson 25.7 9.0 16.1 6.9
LG 17.8 6.3 16.9 7.2
Sagem 4.4 1.5 4.2 1.8
Others 40.5 14.2 45.4 19.2
Total 284.2 100.0 235.1 100.0
Units Q3'06 Share Q3'06
(millions) (percent)
Nokia 88.1 35.1
Motorola 52.0 20.7
Samsung 30.6 12.2
Sony Ericsson 19.5 7.8
LG 15.0 6.0
Sagem 4.0 1.6
Others 41.8 16.6
Total 251.3 100.0
To contact the reporter on this story: Juho Erkheikki in Helsinki at jerkheikki@bloomberg.net .
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