CCS Insight Q1 2007 Mobile Phone Market Analysis
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Published:
Week 17
April 2007 -
Image Source:
CCS Insight
News:
Over the last ten days the leading global mobile phone manufacturers announced their first quarter 2007 financial results revealing diverse performances by the top five vendors and indicating an overall slowdown in growth of the global market.
Key Highlights include:
- Total industry volumes of 257.1 million units representing year on year growth of 12.2 percent.
- Although seasonality has always been a factor in first quarter results, Q1 2007 had the lowest year on year growth since the first quarter of 2005.
- Inventory build up from Q4 2006 was a leading inhibitor to market growth in the first quarter of 2007. Motorola in particular suffered from a disappointing sell in (45.4 million units) owing to high Q4 inventory despite substantial average selling price (ASP) reductions across its portfolio.
- Nokia, Samsung and Sony Ericsson were the success stories of the quarter with year on year growth of 21.3 percent, 30.3 percent and 63.9 percent respectively. This fuelled market share gains at the expense of Motorola which suffered a share decline from 19.8 percent to 17.7 percent year on year and a volume decline of 1.5 percent.
- Portfolio restructuring to fulfil emerging market and entry level prepay demand caused ASP declines across the board as manufacturers strove to balance the product mix to maintain a healthy trade-off between market share and profitability.
- Pricing moves from a number of manufacturers were made during the quarter to create space for new devices in the portfolio. (See CCS Insight wholesale pricing analysis)
- Market polarization continued to accelerate with the top five manufacturers accounting for 81 percent of the market compared to 77 percent in the corresponding quarter of 2006.
