Nokia drops 8 points in Europe — MobileMonday Global: Industry News

^{Mobile phone market grows 24% in Q304} Nokia drops 8 points in Europe

23 Nov 2004 at 17:36 GMT Timo Poropudas

The Western European mobile phone market (mobile phones and converged devices) grew 24 percent year on year, with shipments exceeding 34 million units compared to 27.6 million units in 2003, according to market data for 3Q04 released by IDC.

Converged devices or smartphones witnessed the most significant growth with 70 percent year on year compared to 23 percent in the mobile phone category, with both business and casual users attracted in growing numbers to the flexibility and functionality of an evolved operating system. However, standard mobile phones still dominate in 3Q, constituting over 95 percent of the total market.

Sales of mobile phones continued to be driven by vendors developing and heavily marketing devices, with an emphasis on attractive hardware and features as opposed to the advanced operating systems and software that characterize converged devices.

“Features such as color screens and digital cameras characterized higher-end handsets just 12 months ago. However, with such features now incorporated in mid- and even low-range models, we are seeing a rise in consumer expectations as vendors seek to differentiate product offerings by appealing to consumers through attractive form factors and features,” said Andrew Brown, program manager for European Mobile Devices at IDC.

IDC points to the percentage of standard handsets with color screens and digital cameras as evidence of the rate of evolution in the mobile phone market.

Color screens are now found on over 80 percent of devices compared to just 49 percent in 3Q03, while the inclusion of digital cameras on phones displayed year-on-year growth of over 600 percent to total 72 percent of phones sold, compared to just 11 percent in 3Q03.

3Q also saw the volume of handsets with megapixel resolution cameras begin to grow. 1.3MP cameras are expected to become commonplace in high-end mobile phones and smartphones introduced in 2005.

3Q04 saw the number of devices with Bluetooth rise to 36 percent, constituting year-on-year growth approaching 200 percent.

To date, converged devices have led the market in terms of the inclusion of advanced features such as high-definition screens and cameras, while offering the increased application power of an evolved operating system.

3Q04 saw this advanced product offering continue to shift the market from data-centric devices (PDAs) to voice-centric offerings in the form of smartphones with growing data capability. However, despite this growth, IDC would emphasize that smartphones still have a long way to go before they ship in proportions to rival standard mobile phones.

“Despite enjoying year-on-year growth of over 70 percent, smartphones still represent under 5 percent of the total mobile phone market. With standard mobile phones becoming increasingly advanced in terms of hardware features, most consumers cannot identify any significant differences between the handsets,” said Geoff Blaber, research analyst, European Mobile Devices at IDC.

With smartphones driving significantly higher ARPU compared to standard mobile phones, IDC predicts an increase in the promotion such devices receive, particularly in the wake of new product introductions in 2005.

In terms of overall vendor performance, Samsung, Sony Ericsson, and Motorola all enjoyed significant year-on-year growth buoyed by new product launches accompanied by sustained promotion.

Increased market competition meant Nokia witnessed negative growth of -8 percent and a fall in its overall market share to 34 percent. However, the Finnish vendor remains the clear market leader and IDC predicts a strong 2005 with a host of new product launches both in mid- and high-range mobile phone segments as well as in the Series 60 smartphone category.

Western European Mobile Phone Shipments and Market Share Q3 2004
Vendor	Q3 2004 shipments	Market share Q304	Q3 2003 shipments	Market share Q303	Change, %
Nokia	11.8 mn	34.30%	12.8 mn	46.50%	-8.30%
Siemens	5.2 mn	15.20%	5 mn	17.90%	5.50%
Samsung	4.5 mn	15.20%	2.2 mn	8.00%	106.40%
Sony Ericsson	4.4 mn	12.90%	2.3 mn	8.20%	95.20%
Motorola	3.5 mn	10.10%	1.8 mn	6.60%	88.40%
Others	4.9 mn	14.30%	3.6 mn	12.90%	38.00%
Total	164,100,000	100.0%	27.7 mn	100%	24%