Nokia hangs on to market share — MobileMonday Global: Industry News

^{Price cuts work} Nokia hangs on to market share

30 Jul 2004 at 09:08 GMT Timo Poropudas

Nokia’s decision to cut wholesale prices on its mobile phones appears to have helped the Finnish company to stave off further erosion of its global market share in the second quarter, according to a report to be published on Friday by Strategy Analytics.

Worldwide shipments of new phones climbed by 38 percent in the three months to June 30 from a year earlier to a total of 157 million units while Nokia retained a 29 percent share of that market, unchanged from the first quarter, but still down substantially from its 36 percent share a year earlier.

Nokia’s share of the global mobile phone market has fallen in 2004 to its lowest level in three years. Since May it has sought to stem its losses by offering to retailers discounts of up to 25 percent on certain models. This has lowered the margins of Nokia’s as well as its competitors.

‘‘Nokia has done an impressive job in reacting on price and in adjusting their supply chain,’’ Neil Mawston, the author of the Strategy Analytics report, said.

According to the report Nokia succeeded in clearing three million units of excess inventory during the second quarter.

Strategy Analytics’ report says that Samsung’s market share grew faster than any of the other top six manufacturers. It had a 14.5 percent share of the world market at the end of June, up from just 10.5 percent a year earlier, while another South Korean manufacturer, LG Electronics, saw its sales jump by 88 percent in the period, lifting its market share to 6.3 percent from 4.7 percent. Motorola’s share was 15.4 percent, up from 14 percent in the first quarter of 2003.