Trend towards cameras and colour bolsters sales, but market generally constant.
According to the latest report from IDC, Nokia lost ground to both Siemens and Sony Ericsson in a Western European mobile phone market that overall remained flat year on year. As expected, IDC's European Mobile Phone Tracker research found price cuts on low-end prepay phones and integrated camera and color-enabled phones stimulated renewals rather than first-time subscribers.
As a percentage of the total market, Bluetooth-enabled handsets remained constant at 18%, while phones with an integrated camera increased from 11% to 14%. One in two handsets shipped in 3Q03 had a colour screen.
Siemens made gains in the low-end prepay market with aggressive subsidies on its A55 handset, while impressive T610 sales for Sony Ericsson on both prepay and postpay contracts, backed by extensive advertising campaigns, helped to drive sales. Nokia will rely on 4Q03 and 1Q04 for the majority of its new handset introductions, including its new 6600 smartphone.
Nokia kept its share at over 50% of the market, assisted by the continued demand for higher-end mobile phones and replacements. However, its market share was eroded more than 4% by its two nearest rivals in comparison with the same period in 2002. In keeping with the market trend towards camera phones, Nokia increased its shipments of handsets with built-in cameras by 37% over the previous quarter. The refresh of the 7250, the 7250i, had a large part to play along with the introduction of a range of new handsets. The vendor should receive additional impetus from the introduction of the 3200 phone in 4Q03 and from the 2300 in 1Q04. Nokia will also make its first arrival into the clamshell market with its 7200 expected to appear at the beginning of 2004.
Nokia's converged device sales rose by more than 1% to over half a million units this quarter. Its new offering - the gaming phone N-Gage - should be interesting to watch in the coming quarter.
Sequentially, Siemens exhibited the largest share gain, with over 5% captured. This helped to maintain a strong second position. The German handset vendor released a number of new models across its product range, with the Siemens A models (low-end, voice-centric, mono screen) performing particularly well in the prepaid market. Siemens' efforts to encourage multiple phone ownership through the Xelibri fashion range proved less successful. Despite lower-than-expected shipments, Siemens will continue with the Xelibri brand by adding new models to the portfolio, introducing a new advertising campaign, and launching the range in traditional mobile phone channels.
Sony Ericsson achieved the only other positive share change among the top 5 vendors. In comparison to its weak performance this time last year it showed an improvement of 51%. This was in part due to the strong advertising of its new range of handsets. A plentiful supply of T610 phones to channel partners stimulated a number of renewals. Sony Ericsson should also experience a strong end-of-year, with the P900 device and forthcoming Z600.
Motorola experienced a weak performance in Western Europe compared to worldwide. The majority of Motorola's newer models have already been available on the market for a number of quarters.
Samsung maintained its market share sequentially, as Europeans grow more accustomed to the clamshell form factor. The Korea-based vendor is also increasing mindshare across European end users, and as a supplier among European mobile network operators.
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