Nokia, Motorola widen lead in Asian markets

Nov 22 | Updated: Nov 23 2005, 07:44am hrs
Nokia Oyj and Motorola Inc, the worlds two largest mobile-phone makers, widened their lead over smaller competitors in the Q3 on demand in emerging markets in Asia.

Nokias global share rose to 32.6% in the third quarter from 31.9% in the previous three-month period and 31% a year earlier, Stamford, Connecticut-based researcher Gartner Inc said on Tuesday in an e-mailed statement. Motorolas share rose to 18.7% from 17.9% in the second quarter.

Motorola and Nokia are gaining market share from Samsung Electronics Co, Sony Ericsson Mobile Communications Ltd and LG Electronics Inc with their entry-level phones in developing markets, where most of the growth is generated. Nokia and Motorola are also adding features such as cameras and music players to lure US and European buyers and limit the effect of falling prices.

Until we see Samsung, Sony Ericsson and LG addressing the emerging markets needs, well see Nokia and Motorola keep gaining market share, Carolina Milanesi, an analyst at Gartners UK office, said in a telephone interview.

Global mobile-phone unit sales rose 7.8% in the third quarter from the previous three months, Gartner said.

The researcher raised its forecast for global sales to 810 million units in 2005 from an earlier forecast of 779 million. That will be up from 674 million units last year and 520 million in 2003. Well see another record in the fourth quarter, and the market will grow 10-15% in 2006, Ms Milanesi said. Unit sales at Nokia rose 28% to 67 million in the quarter from 52.2 million a year earlier, Gartner said.

Espoo, Finland-based Nokia has cut prices on low-end phones and added high-resolution cameras and new designs to spur revenue growth and win back market share, which reached a five-year low in early 2004.

Fast Dial
Global mobile-phone unit sales rose 7.8% in the Q3 from the previous three months
Motorola sold 38.5 m phones, up from 22.6 m
Unit sales at Nokia rose 28% to 67 m in the quarter from 52.2 m
Nokia, which wants 40% market share, plans to introduce 40 new models this year
While Nokias market share is swelling, increased sales in emerging markets are reducing average handset prices.

The price of a Nokia handset dropped to an average 102 euros ($120) in the Q3 from 105 euros in the Q2 and 108 euros a year earlier. Nokia said on Oct 20 average prices will probably shrink more in Q4 as more low-end handsets are sold in Latin and North America.

Nokia has definitely made a huge effort to address the issues they had, Ms Milanesi said. They need to continue doing what they are doing. Their product portfolio still has room for improvements. The Finnish company, which has a long-term target of a 40% market share, plans to introduce 40 new models this year to recoup market share.

All regions grew this quarter, Ms Milanesi said. Asia Pacific was very healthy. Latin America and the US had more of a normal Q3, which is usually a non exciting quarter. Western Europe is still amazing.

Schaumburg, Illinois-based Motorola, the worlds second-biggest handset maker, sold 38.5 million phones, up from 22.6 million a year earlier, helped by sales of the Razr model. Motorola needs to address whats going to come after the Razr, Ms Milanesi said. They cant rely on the Razr to keep the edge.