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Global mobile phone sales soar

Sales in the Asia Pacific region are thriving.
Sales in the Asia Pacific region are thriving.

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HANOVER, Germany (Reuters) -- An end-of-year buying spree by consumers lifted sales of mobile phones well above forecasts in 2002, a research group has said, adding it expects even stronger growth in 2003.

A total of 423 million handsets were sold to consumers in 2002, up 6 percent from 400 million units in 2001 and several million more than forecast, said Gartner Dataquest, one of the key research groups of the technology industry.

Market shares of the five key players changed little from the third quarter, with Finland's Nokia still firmly in the lead and selling more than twice the number of handsets than its nearest competitor, Motorola Inc. of the United States.

However, Nokia no longer gained any market share over its smaller rivals.

"We've seen phenomenal growth in countries like Germany and the Asia Pacific region," said Gartner analyst Ben Wood.

Growth, especially in mature markets, was driven by consumers who replaced their old handsets with new ones earlier than expected.

Subsidies by mobile operators, crucial to push consumers into getting a new phones, was similar to previous quarters, meaning that the attractiveness of new products and the marketing were behind the sales increase, Wood said.

"We expect growth will increase, to perhaps 10 to 15 percent this year," Wood said. It would be the first double-digit percentage growth year since 2000 when sales climbed some 50 percent to over 400 million but then stagnated.

Reason to ditch

The onus for manufacturers is on offering new features.
The onus for manufacturers is on offering new features.

To maintain growth rates phone makers are focusing more on replacement sales because many consumers already have a phone -- some one billion people around the world now use a mobile phone.

This means manufacturers need to offer new features to give consumers a reason to ditch their old device.

Although a lot of attention is being paid to new color screens and camera phones, most of the year-end sales surge was in basic handsets which now contain more features than before, such as voice dialing and musical ringtones.

"The advent of new handsets with cameras and co lour screens has encouraged people to go to the shops where they found that low-end phones also have a lot of features," Wood said.

He warned that operators were preparing to cut phone subsidies, which could hurt sales in 2003.

Nokia's fourth-quarter market share was 36.8 percent, barely changed from 36.9 percent in the year-ago period. It ended 2002 with a 35.8 percent share, up from 35.0 percent in 2001.

Nokia role

Consumers are replacing their old handsets sooner than expected.
Consumers are replacing their old handsets sooner than expected.

Wood said operators were increasingly concerned about Nokia's dominance. "They're looking at other handset makers to close the gap," he said.

Gartner measures sales to end-users, while rival market researchers which have published 2002 statistics several weeks ago, measure shipments into the sales channel.

Motorola had a fourth-quarter share of 15.6 percent, versus 14.7 percent in the year-ago period, while its full-year share was 15.3 percent versus 14.8 percent the previous year.

Industry No. 3 Samsung stalled in the fourth quarter compared with the third, as the South Korean government halted shipments in an effort to stop all phone subsidies, but it still ended 2002 with a 9.8 percent market share, up from 7.1 percent in 2001.

Germany's Siemens, overtaken by Samsung last year, also continued to grow, ending the year at 8.2 percent versus 7.4 percent in 2001.

Japanese-Swedish Sony Ericsson, whose full-year market share dwindled further to 5.5 percent from 6.7 percent, turned the corner in the fourth quarter by reversing the long string of quarter-on-quarter declines.



Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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