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Global mobile phone shipments up 14.3 percent: Report

New research shows that the number of mobile phones shipped in the first quarter of 2008 jumped 14.8 percent from the previous year.

Handset makers shipped 291.6 million units in the first quarter, down 11.6 percent from 330.8 million units in the fourth-quarter 2007 but up from 255 million units in the first-quarter 2007. That data is from market researcher IDC's Worldwide Quarterly Mobile Phone Tracker.

"There's been a lot of talk among the large vendors in the industry how they expect 2008 growth to slow compared to previous years," said Ryan Reith, senior research analyst for Worldwide Mobile Phone Tracker at IDC, Framingham, MA. "And so what we're saying is that we saw pretty much first-quarter growth year over year.

"So essentially what that means is that 14 percent growth year over year is more than it was in 2007," he said. "What that means is that these previous warnings from Nokia and Sony Ericsson that 2008 is going to slow, maybe that isn't the case."

That said, IDC does expect the mobile phone market will be under increased pressure in a weak consumer economy. Rising food and fuel prices and worries over the financial markets may result in restrained consumer spending.

Even in this market, Nokia maintained its lead over its rivals.

The Finnish firm shipped 115.5 million units in first-quarter 2008, accounting for a 39.6 percent market share and a 26.8 percent increase from the year-ago quarter.

Nokia shipped 91.1 million units in the first quarter of 2007, accounting for a 35.7 percent market share.

The company's total shipment volume was greater than the next three manufacturers combined. High volume sales of entry-level devices along with more feature-rich phones such as the N series and a strong presence in emerging markets help keep Nokia in its leadership position.

Samsung was No. 2, with 46.3 million shipments and a 15.9 percent share and a 33 percent year-over-year growth. The South Korean company shipped 34.8 million phones in the first-quarter 2007, accounting for a 13.6 percent market share in that period.

Samsung's growth comes at the expense of Motorola, IDC said.

An improved Samsung presence in key emerging markets balanced out against soft demand in Europe and North America. The company also cut marketing expenses. It is confident that it will meet its goal of shipping 200 million units this year, though.

Motorola held third place, with 27.4 million mobile-phone units shipped and a 9.4 percent market share in the first quarter of 2008. This was quite a drastic fall from 45.4 million units shipped in the first quarter of 2007 and a 17.8 percent market share.

Overall, Motorola shipments dropped 39.7 percent in the first quarter of 2008 compared with the previous year.

Gaps in its product portfolio as well as another quarter of operating losses and lower operating margins hurt Motorola. The company aims to regain traction with the separation of its mobile devices business unit from the rest of the company.

No. 4 LG Electronics saw the biggest percentage jump in the first quarter of 2008 compared with the prior year: 54.4 percent.

The South Korean manufacturer shipped 24.4 million units in the first quarter of 2008 and boasted an 8.4 percent market share. The comparable numbers for first-quarter 2007 were 15.8 million units and a 6.2 percent market share.

Demand for its flagship feature phones, including Viewty, Venus and Voyager, went against the trend of a seasonal decrease in shipments. The company plans to improve its presence in emerging markets and ship more high-end devices in the next quarter, IDC said.

Sony Ericsson rounded off the top five, with 22.3 million units shipped in the first quarter of 2008 and a 7.6 percent market share. The Japanese-Swedish joint venture shipped 21.8 million units in the first quarter of 2007 and accounted for an 8.5 percent market share.

Sony Ericsson's growth in the first quarter of 2008 versus the year-ago period was 2.3 percent. The company has faced decreased demand for its mid-range and high-end devices, channel inventory build-up, component shortages and more interest in low-price phones in Asia-Pacific where the company has not had a strong presence, IDC said.

Other manufacturers accounted for 55.7 million shipments in the first quarter of 2008 and a combined share of 19.1 percent, versus 46.1 million shipments and an 18.1 percent market share in the year-ago quarter. These brands accounted for a 20.8 percent year-over-year growth.

IDC's Mr. Reith expects that growth this year will come from strategic areas such as the low-cost phone segment and emerging markets worldwide.

"In the mature markets, which we look at as the United States and Western Europe, we expect growth to come from the high-end market, which is smartphones," Mr. Reith said.

"When growth comes from the low-cost segment, the average cost of the handset goes down," he said. "It causes these vendors who are playing in that space to come up with a very cost-effective solution."

What advice would he give handset makers?

"The advice I would have is to take a cautious approach to chasing market share and keep focus on profitability," Mr. Reith said.