CCS Insight Q2 2007 Mobile Phone Market Analysis
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Published:
Week 29
July 2007 -
Image Source:
CCS Insight
News:
Over the last seven days a number of the leading global mobile phone manufacturers announced their second quarter 2007 financial results revealing a fundamental shift in the structure of the global mobile phone market and providing further evidence of a slowdown in growth.
Key Highlights include:
- Estimated total industry volumes of 259.9 million units representing year on year growth of 10.7 percent.
- Emerging markets continued to drive industry volumes as growth in mature markets such as Western Europe and North America softened as a result of high penetration levels and lengthening contract terms.
- Estimated Nokia volumes of 98 million units constituting an increase in market share to 37.7 percent from 33.4 percent in 2Q06. CCS Insight anticipates the entry level segment to have been a leading factor in growth as a result of Nokia’s 1xxx (1100/1112) and 2xxx (2310/2610) series products in tandem with an improved portfolio of mid-tier products. Nokia’s comprehensive presence in premium segments continued to support ASPs as the low tier portfolio expanded.
- Samsung displaced Motorola to claim second position with shipments of 37.4 percent and a market share of 14.4 percent. However, growth in volume came at a price and led to a decline in Samsung’s margins with profit margin declining to 8 percent in 2Q07 from 13 percent the previous quarter.
- With the exception of Motorola the top 5 vendors all exhibited healthy double digit growth with Sony Ericsson and LG increasing pressure on the US vendor with growth of 59 percent and 25 percent respectively.
- Growth in excess of the market average for four of the top 5 vendors saw pressure continue to increase on the smaller players as the top 5 grew to represent 82.7 percent of the market compared to 79.5 percent in the corresponding period of 2006.
- Although Samsung is now the vendor most capable of competing with Nokia, CCS Insight believes lessons learnt from Motorola’s experience of pursuing market share at almost any cost combined with the requirement to increase profit margin in the coming quarters means that significantly closing the gap with Nokia is unlikely in the short term.
