"Give credit to Samsung for taking the number two position worldwide from Motorola," says Ramon Llamas, research analyst with IDC's Mobile Devices Technology and Trends team. "For the past few years, Samsung’s growth kept pace with the market, but in 2007 the company beat the market almost by a factor of four. Samsung capitalized on replacement handset opportunities in the United States and Europe with a steady stream of mid-range and high-end devices while Motorola spent much of the year addressing inventory challenges across EMEA and Asia. Now that Motorola is implementing a new handset strategy, it will be interesting to watch the hotly contested number two position in 2008."
“Over the last three years, growth in the industry during the holiday quarter has fluctuated from 18.0% to 30.0%, and this past quarter we saw it drop to 11.6%,” said Ryan Reith, senior research analyst with IDC’s Worldwide Mobile Phone Tracker. “The expectation that the market would maintain the level of growth it saw over the last three years was unrealistic. We expect growth to be in the single digits throughout 2008, and most likely for years to follow.”
Top Five Mobile Phone Vendors
Nokia shipped more units in the fourth quarter than the next three vendors' shipment volumes combined. This, Nokia executives pointed out, was the result of its streamlined operations, which produced on average nearly 1.5 million units each day during the quarter. This number could have been even higher if the company did not have to deal with component shortages during production. Regardless, it still marks a significant accomplishment. Nokia's volumes were primarily driven by entry level products from its 1100 and 1200 device families, but its biggest revenue and profit generators came from its premium Nseries devices.
Samsung achieved several noteworthy accomplishments to end 2007: It took the No. 2 position worldwide for the year, posted its third consecutive quarter as the No. 2 vendor worldwide, and recorded its sixth consecutive quarter of shipment growth. In the process, Samsung realized double-digit profit margins during the quarter, resulting from an emphasis on its premium Ultra Edition phones and converged mobile devices. Looking ahead to the first quarter of 2008, the company plans to top its 46.3 million shipment volume while maintaining profit margins.
Motorola spent another quarter addressing its challenges, the most significant being a slowing demand for Motorola's products. CEO Greg Brown pointed out that the company had missed out on significant growth areas, most notably in 3G, China, and emerging markets, and that gaps in Motorola's current product portfolio had to be addressed. Recent announcements of its ROKR E8, Z10, and W series reflect Motorola's attempts to revive its handset business, but recovery is expected to continue into 2009.
Sony Ericsson broke through the thirty million unit mark for the first time in its history. As in previous quarters, EMEA represented the bulk of the company's shipments, but it also improved its presence in North America, Latin America, and Asia Pacific. Even with greater attention and resources going towards emerging markets, Sony Ericsson still recorded the highest ASP among the leading vendors. Key devices for the quarter included the K550, W200, W300 and the W580.
LG Electronics took another step towards breaking the 25 million mark, and with the success of premium devices in developed markets and cost effectiveness, the company also realized slight operating margin improvement. Key to its success were several models released during the quarter, including the Voyager and Venus in the United States, and the Viewty in Europe. Despite its positive results during the quarter, LG saw the distance between itself and Sony Ericsson grow to more than seven million units, reversing the progress it had made in previous quarters.
