| One billion cellphones expected to ship this year |
Oct. 20, 2006
Despite a soft second quarter, both in terms of units and average selling prices, the mobile phone market is expected to achieve shipments of one billion units this year, according to ABI Research. Over 245 million mobile handsets shipped in Q3, and 4Q is expected to be a "bumper quarter," the market research firm said.
According to ABI's research director, Jake Saunders, "The handset vendors are pulling out all the stops to get their slickest, flattest, largest music memory, biggest mega-pixel camera phones onto the shelves in time for the 4Q-2006 holiday jamborees."
During Q3, the top five suppliers all increased market share at the expense of the smaller handset vendor, ABI noted. The top two were Nokia, at 36 percent, and Motorola, at 23.3 percent. They were followed by Samsung (12.5 percent), Sony Ericsson (8.1 percent), and LG (6.7 percent).
ABI cited marketing muscle and economies-of-scale as key factors in the success of the top five vendors, which the research firm calls the "gang of five." Although super-thin phones helped device-makers Samsung and Motorola gain market share, "Nokia's ability to pump out phones for the emerging markets, cut handset ASPs (average selling prices), and exploit its brand image have served to maintain, and even boost, Nokia's market-share," according to ABI principal analyst Stuart Carlaw.
"Cut-throat competition" in the "scramble for market share" resulted in lower ASPs, ABI said. "Global weighted ASP" was 7.8 percent lower in 3Q than in Q2, in contrast to Q2's 1.6 percent increase over Q1's ASPs. Q4 is not expected to fare any better.
ABI also reported that shipments of 3G handsets "softened" during Q3, most likely due to the growing availability of 2.75G EDGE, which eats into the perceived benefits of 3G over 2G GSM.
A number of vendors and carriers are expected to introduce new 3G and 3.5G HSDPA-capable devices during Q4. "HSDPA will dramatically change the download experience for end users wishing to download music, games, etc," ABI said. "The question is, will the turbo-charge kick in quickly enough?"
Further details on ABI's "Mobile Devices Market Forecasts," which are part of the firm's "Mobile Devices Research Service," are available here.
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