Early Verdicts On Q3 Device Sales Roll In
By Carlo Longino, Wed Oct 27 19:15:00 GMT 2004

The first assessments of mobile terminal sales in the third quarter are out, and the industry is still seeing strong growth -- though one analyst warns things could soon cool off.

168 million handsets shipped worldwide in the third quarter, according to Strategy Analytics, 25% more than in the same period last year. Not much has changed in the top six handset vendors, but Samsung has pulled within less than half a percentage point of Motorola for the second spot.

Samsung sold over 50% more handsets in this year's third quarter than last year, while Motorola's sales over the same period grew just 4 percent. The company's strategies look to be going opposite directions: whereas Samsung used to focus on the high end of the market, it has followed Nokia's price cuts and watched its margins shrink but unit sales rise. Motorola, on the other hand, looks to be willing to sacrifice sales volume to protect profitability.

Nokia bounced back over the 30% threshold, but still remains four points lower than a year ago. LG saw strong growth, helped by inroads into the GSM market as well as good results from its WCDMA devices. LG and Sony Ericsson look to be taking share from Siemens, which solidified its hold on the #4 spot thanks to strong EMEA demand, but still remains two points lower than last year.

Analyst Neil Mawston warns that overall market growth will slow in 2005. The firm is sticking to its prediction of 670 million units for all of 2004, 30% than in 2003, but sees just 8% growth, to 726 million handsets next year, with the slowing upgrade cycle in maturing markets to blame.

Two other analysts point out the smartphone market continues to explode -- IDC says third-quarter sales in Europe were up 60%, while Canalys, which defines the market a bit differently, says sales worldwide nearly tripled. Both firms say RIM saw over 300% growth in the quarter over last year, while Symbian remains the most popular operating system.