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Nokia's handset market share slides in 1st quarter |
swipe108
Joined: Mar 18, 2004
Posts: 264
From: Philippines
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Nokia's handset market share slides in 1st quarter
Nokia's share of the global cellphone market fell sharply in the first quarter, hurt by a lack of new models and a rocky relationship with mobile phone service providers, a survey found on Tuesday.
By BusinessWorld / June 10, 2004
Though the industry leader shipped more phones than in the first three months of 2003, its market share slid to 28.9% from 34.6%, market research group Gartner found, as Nokia lost ground to all of its top six rivals.
Gartner also noted that the overall handset market was growing strongly, with shipments rising 34% to 153 million units in the first quarter as consumers in emerging markets embraced mobile communications.
"The big story is in Western Europe, where Nokia has lost 10 percentage points of market share," said Gartner analyst Ben Wood.
"Nokia has two fundamental problems. One is its relationship with operators to provide them with personalized phones, and the other is a product portfolio that is not competitive with the models offered by its rivals," Mr. Wood said.
Nokia warned in April that it could not match the breakneck growth of the market due to a hole in the mid-range of its handset portfolio, and said it would sacrifice profitability in the short term until its lineup was more competitive.
Nokia admitted on Tuesday it had been wrong to put its own brand name before those of the operators.
"In the past, device makers made sure to differentiate their own products. It was a huge mistake to not help the operators to differentiate their products too," said Antti Vasara, vice-president at Nokia Technology Platforms at the Mobile Handset Forum in Amsterdam.
Analysts remain worried Nokia's price cuts on some phones may not be enough to halt its market share slide, with some saying it may have to lower its current second-quarter guidance for flat to slightly lower group sales year on year.
The first-quarter market share decline marks a sharp deterioration from the 38% share that Nokia claimed for 2003, and is a far cry from its goal of 40%.
Nokia has said it lost ground in the first quarter, but estimated its market share only fell to 35%. Its handset unit sales actually increased in the period due to the robust market demand, but it could not grow as fast as its rivals.
The Finnish firm has lost about a third of its market value since it warned on April 6 that its market share was on the decline.
Nokia shares gyrated on Tuesday after the Gartner data's release, before settling down and rising 0.2% to 11.66 euros by 1550 GMT, underperforming the DJ Stoxx European technology index, which was up 0.5%.
Gartner measures sales to consumers -- instead of sales to retailers -- and is considered the industry's best indication for actual consumer demand. Its market share data chimes with figures released by research group Strategy Analytics in April.
Analysts said that, as the data were largely backward-looking, their value was limited, but expressed surprise at the differences between Nokia's and Gartner's estimates.
"Once again, people will question why there is such a big discrepancy between Nokia numbers and Gartner numbers, really between Nokia and all other figures," said Evli Bank analyst Karri Rinta, who rates Nokia shares "reduce".
Gartner said global number two Motorola boosted its market share to 16.4% from 14.7%, while that of South Korea's Samsung Electronics rose to 12.5% from 10.8%.
Rounding out the top five, Siemens's share rose to 8% from 7.6%, and Sony Ericsson was at 5.6% versus 4.7%.
In mature markets, Gartner said older handsets were replaced with newer models featuring color screens and cameras. "Russia was phenomenal in the first quarter. Brazil is just on fire and there's strong replacement in mature markets like Western Europe and North America," Mr. Wood said.
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Sammy_boy
Joined: Mar 31, 2004
Posts: > 500
From: Staffordshire, United Kingdom
PM, WWW
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Quote:
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On 2004-06-10 11:11:33, swipe108 wrote:
"Nokia has two fundamental problems. One is its relationship with operators to provide them with personalized phones, and the other is a product portfolio that is not competitive with the models offered by its rivals," Mr. Wood said.
Rounding out the top five, Siemens's share rose to 8% from 7.6%, and Sony Ericsson was at 5.6% versus 4.7%.
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- 'personalised phones' - Does this mean things like the 'T-Zones' and Vodafone Live! you get shoved in phones' firmware, and the branding all over the phone? I wish operators wouldn't do that - is spoils the looks of phones - I've just fixed the LCD in a T610 - which would look even better than it does if it wasn't for all that Voda stuff all over the facia and firmware! 
I always thought that  's market share were more than that! Unless that's just in the UK. I see more phones round here than Motorola, Siemens or Samsung phones!
"All it takes for evil to flourish is for good men to do nothing" - Edmund Burke
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slattery69
Joined: Jan 03, 2003
Posts: > 500
From: north east england
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no thats global market share se has been very low since it started and ericsson was no better
nice to see it moving in the right direction but others are just as competitive motorla seem to be really going after nokia this year new ui lots of new phones at different ends of the market and imo some of there designs are superb | |
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Posted: 2004-06-10 11:11
