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News

20 April 2007

 

Inventory build-up trims mobile handset shipment growth to 12% in Q1/2007

In first-quarter 2007 global mobile phone shipments grew a sluggish 12% year-over-year to 252 million units, according to market research firm Strategy Analytics in its report ‘Q1 2007 Global Handset Market Share Update’. This was the first quarter in almost two years that annual growth has been below 20%.

“Worldwide cell phone shipments have been growing at an average annual rate of 25% over the past six quarters,” says associate director Neil Mawston. “While Q1 growth is seasonally slower, the 12% growth registered in the first quarter of 2007 is markedly down on that longer-term trend.”

“A moderate build-up of inventory in Q4/2006 led to weaker shipments during Q1/2007. We estimate a sizeable 9 million units of excess inventory were sold off worldwide during the first quarter,” adds analyst Bonny Joy. “Looking ahead to the second quarter, we expect more stock to be cleared from channels and the supply chain should eventually return to normal levels early in the second half of the year.”

Compared to Q4/2006, in Q1/2007 number-1 handset vendor Nokia’s market share grew from 35.7% to 36.2% while Motorola’s slumped sharply from 22.2% to just 18%. Nokia’s lead over Motorola of 18.2% points is the largest gap between the two since Q4/2003. Number-3 vendor Sony Ericsson’s market share was almost unchanged at 8.7%.

Number-4 vendor Samsung rebounded with strong volumes (increasing its market share from 10.8% to 13.8%), while number-5 vendor LG strengthened its profit margins (while also increasing its market share, from 5.8% to 6.3%). These are tentative signs that the big Korean players are on the verge of a comeback, concludes Strategy Analytics. The collective market share of other vendors grew slightly, from 16.7% to 17.1%.

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Handset shipments reached forecast of 1 billion units in 2006, says Strategy Analytics

Visit: http://www.strategyanalytics.com