Mobile Phone Sales Surge

First-time buyers in emerging markets helped drive the still-growing mobile phone market in the third quarter of this year, IDC said Wednesday.

Markets like China, India, and Central Europe are seeing first-time sales growing, according to Andrew Brown, IDC program manager for mobile devices in Europe, the Middle East, and Africa.

"Elsewhere, it's mainly a replacement market, but some emerging markets are extremely significant," he said.

Worldwide shipments of mobile phones rose 21.2 percent compared to the third quarter of last year, reaching 130.1 million units, IDC said.

On Top

Nokia remained the leader with 35 percent of the market, while LG Electronics pushed Sony Ericsson Mobile Communications out of the number-five spot, with 5.8 percent compared to Sony Ericsson's 5.5 percent, the report said.

Motorola was in second place, boasting a market share of 15.5 percent, ahead of Samsung Electronics with 11.5 percent, and Siemens with 8.7 percent.

The top five vendors have started to regain their market share after slipping slightly at the start of the year, IDC said. Between the fourth quarter of 2002 and the first quarter of 2003, the share of the top vendors fell from 77.3 percent to 71.4 percent. They have fought back and now have 76.6 percent of the market, but IDC points out that the growing number of Asian vendors will challenge the top five companies to their share.

High Style

LG Electronics and Samsung have taken market share from other companies, which have found it hard to compete with their stylish handsets and low costs, Brown said. The European operators are beginning to recognize the need for Japanese-driven design, he said, citing new handsets from Sony Ericsson.

"If you look at their T610, T300, you can see the Asian design there," he said.

Compal Electronics and Mitac International are two Asian companies to watch, he said. "Mitac is very interesting, with its move into the [Microsoft] Windows Smartphone market, and there are other Asian players capable of making commoditized handsets, nice sleek designs at low cost."

While Asian players will have difficulty competing with Nokia's dominance in Europe, "Nokia's not that important in the U.S., because it's not taking CDMA very seriously, and there's a huge Chinese market where an understanding of the culture will help," he said.

However, "you can never underestimate Nokia, with its ability to change and evolve," he said.

Replacement sales in mature markets have been sparked by camera phones and color screens, IDC said.

IDC, in Framingham, Massachusetts, is a division of International Data Group, parent company of IDG News Service.