Mobile handset sales surpass expectations in 3Q 2002 - Financial Perspectives: Global - according to Gartner Dataquest - Industry Overview

It may be premature to talk of an industry upturn, but Gartner Dataquest supplied a rare bit of good news for mobile operators and vendors when it announced that handset sales were on the up again. With 104.3 million units sold in 3Q 2002, it was a 7.8 per cent rise compared with 30 2001. "We believe that this growth will carry on into 4Q 2002 as a wave of innovative mobile colour terminal models become widely available during the final quarter of the year," says Bryan Prohm, senior analyst within the mobile communications worldwide research group at Gartner Dataquest.

Gartner Dataquest argues that a mass-market take-up of these new handset features may only be popular over the next 18 months and so manufacturers will need to continually innovate.

In terms of vendor market share, Gartner's 3Q 2002 research revealed that Nokia increased its dominance to 35.9 per cent (34.1 per cent in 3Q 2001) but the number two handset manufacturer -- Motorola -- saw its global market position decline from 15.2 per cent (30 2001) to 14.4 per cent (3Q 2002).

The consultancy cites delays in the availability of Motorola's two new handsets -- the T720 and C330 -- as a significant reason for its drop in market share. Gartner further observes that Motorola is looking increasingly exposed to market uncertainty within China question mark surrounding CDMA's future prospects) and US (low take-up of wireless data applications -- especially SMS -- in the well-penetrated CDMA market). Bath countries accounted for more then 50 per cent of the vendor's 3Q 2002 sales to end-users. "Because of this, we believe that Motorola's best opportunity in realising significant market sector growth during the forthcoming quarters is to develop a stronger presence in the GSM markets of EMEA and Asia-Pacific," says Ann Liang, industry analyst for Gartner Dataquest.

John Delaney, principal analyst at the Ovum consultancy, disagrees: "The EMEA and Asia-Pacific markets are presently overrun by far-Eastern handset manufacturers, which is why Nokia has had to invest huge amounts to counteract that threat," he argues. "Motorola would therefore have to invest a lot of money into these markets in order to defend itself against an aggressive Nokia and the incursion of far-Eastern vendors."

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