Price Wars Loom As Mobile Phone Market Edges Toward Recovery
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The mobile phone market is showing signs of recovery, with two research firms predicting that growth will return in the fourth quarter. Strategy Analytics put the total number of handsets shipped worldwide in the third quarter at 291 million, down 4 percent from a year earlier, while IDC put the figure at 287.1 million, or a 6 percent decline from last year. But the rate of decline is apparently slowing, with IDC noting that global handset shipments were up 5.6 percent from the second quarter.
As with the second quarter, Motorola (NYSE: MOT) and Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) were the big losers. According to IDC, Sony Ericsson saw shipments tumble 45.2 percent, while Motorola’s handset sales plunged 46.4 percent. Nokia (NYSE: NOK), too, saw its market share drop, with sales declining 8 percent. Samsung (+15.9 percent) and LG (SEO: 066570) (+37.4 percent), meanwhile, were the only two of the big five to see their market share grow. The two Korean firms now account for just over a third of all handsets sold.
But while mobile phone shipments may be edging back up, not all is rosy for the industry, especially moving from the lucrative holiday season to the new year. As vendors pump out new models to keep up with the competion, the market faces a glut of phones. MKM Partners’ analyst Tero Kuittinen told Reuters, “In 2010, we are getting oversupply as the industry is emerging from a major volume decline. The danger here is that the cut-throat competition is going to blight the industry recovery.”
Posted In: Mobile, Companies, LG, Motorola, Nokia, Samsung, Sony, Sony Ericsson
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