Cell phone shipments continue to climb in Q1

(IDG News) The global cellular handset market saw robust growth during the first quarter, according to reports from major handset manufacturers.

Most of the top handset makers registered double-digit percentage growth during the first quarter compared to the same period a year earlier but only one managed growth from the fourth quarter. Siemens AG registered a double-digit loss on both the previous quarter and first quarter of 2004.

Nokia Corp. again led the market, shipping 53.8 million handsets during the quarter, up 20.4 percent on the first quarter of 2004. Nokia estimated the global market was 170 million handsets during the quarter. Based on that figure, the company claimed 31.6 percent market share.

It saw strong growth in China, Asia as a whole, Europe, the Middle East and Africa but lower shipments in North and South America. Nokia attributed its poor performance in these latter markets to a market switch away from the old TDMA (Time Division Multiple Access) technology to the newer GSM (Global System for Mobile Communications) and CDMA (Code Division Multiple Access) technologies.

This switch helped its nearest competitor, Motorola Inc., increase its shipments 13.4 percent on the year-earlier quarter to 28.7 million handsets. Motorola credited new handsets like its Razr model for some of its success.

South Korea's Samsung Electronics Co. Ltd. was the only major handset maker to see shipments increase from the fourth quarter, although that's partly because it registered poor performance in the last quarter of the year. The company shipped 24.5 million handsets during the quarter, which was up 16.1 percent on the fourth quarter of 2004 and 21.9 percent on the first quarter of last year.

That meant Samsung Electronics kept its global number three position ahead of LG Electronics, which shipped 11.1 million handsets during the three months. Poor performance by Siemens AG cost the German company its number five position to Sony Ericsson Mobile Communications AB, which shipped 9.4 million phones. Siemens shipped 9.3 million handsets during the quarter.

While shipments continue to rise for almost all the major cell phone makers, the picture isn't entirely rosy.

Price competition in the market is forcing down prices and that's cutting into sales and profits at some companies. Sony Ericsson reported a 6.8 percent increase in phone shipments on the year-earlier quarter but a 4 percent drop in sales. Nokia managed an 11 percent growth in sales compared to the year-earlier quarter, but operating profits slipped 16 percent.

Looking ahead to the entire year, Nokia predicted the global market would reach 740 million handsets this year while Samsung Electronics issued a more conservative estimate of 700 million.

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