Top Six Vendors Drive worldwide Mobile Phone Sales to 21 Percent Growth in 2005

Gartner: Worldwide mobile phone sales totaled 816.6 million units in 2005, a 21 percent increase from 2004, as the leading six vendors increased their share of the market at the detriment of smaller vendors. The top six vendors accounted for 79.4 percent of worldwide mobile phone sales in 2005. These leaders experienced a steady increase in market share throughout the year, as their market share increased from 78 percent in the first quarter to 84 percent in the fourth quarter of 2005. As competition continues to drive price pressure in the low-end, and a design and technology arms racein the high-end, the survival of the fittest depends more and more on economies of scales, or very carefully cut out niche markets. In the fourth quarter of 2005, the mobile phone market remained strong with sales exceeding 235 million units (see Table 1). This is yet again the biggest quarter on record since Gartner started tracking the market on a quarterly basis in 2001. The industry experienced record sales due to continued strong growth in emerging markets, where falling prices for cellular connectivity (phones and subscriptions) resulted in higher-than-expected sales. In more mature markets, such as Western Europe and North America, replacement sales were driven by users that gave into the charm of highly fashionable devices. Table 1 worldwide Mobile Terminal Sales to End-Users in 4Q05 (Thousands of Units)

Company	4Q05 Sales	4Q05 Market Share (%)	4Q04 Sales	4Q04 Market Share (%)
Nokia	82,218.3	35.0	64,387.3	33.0
Motorola	41,884.0	17.8	31,744.3	16.3
Samsung	28,385.4	12.1	23,883.7	12.2
LG	16,875.0	7.2	13,340.5	6.8
Sony Ericsson	16,118.7	6.9	12,335.8	6.3
BenQMobile	11,101.7	4.7	12,821.0	6.5
Others	38,546.6	16.3	36,807.9	18.9
Total	235,129.7	100.0	195,320.5	100.0

Note* This table includes integrated digital enhanced network (iDEN) terminals. It excludes original design manufacturers to original equipment manufacturer shipments and .Code Division Multiple Access Wireless Local Loop (CDMA WLL) Source: Gartner Dataquest (February 2006) More tebles in press release. Nokia remained the worldwide leader with 32.5 percent of all mobile phone sales in 2005 (see Table 2). It now has a market share that is more than double that of its nearest competitor in Europe and Asia, and more than three times its nearest competitor in Eastern Europe, the Middle East and Africa. After a difficult 2004, Nokia bounced back bringing to market successful products like the 6680, highly stylish products such as the 8800 and it took the lead in the Wideband Code Division Multiple Access (WCDMA) market with products such as the n70. To illustrate Nokia's performance, more than one third of the world's phone users bought a Nokia phone in the fourth quarter of 2005. With sales just under 42 million units in the fourth quarter of 2005, Motorola retained the number two spot in Western Europe and at a world-wide level. It remained the preferred brand in North America and displaced Samsung from the number two spot in Asia Pacific. In 2005, thinwas definitively better for Motorola that recorded the largest market share growth among the top manufacturers in 2005. Samsung remained in the third position in the fourth quarter of 2005 with sales totaling 28.4 million units. For 2005 its market share remained static at 12.7 percent, with only a 0.1 percentage point gained from 2004, widening the gap with Motorola. This is mainly due to Samsung favoring margins over market share and the decision not to enter the price war in the emerging markets.

Worldwide mobile phone sales

Publ 20060228