Global handset industry is riding the growth curve - report

July 23, 2004

As economies continue to recover around the globe, the mobile handset business continues to ride a growth curve as well, reports In-Stat/MDR. The high-tech market research firm believes that shipments will be strong again this year, as manufacturers seek to fill surging demand for new mobile phones in both emerging markets and mature ones.

Some leading manufacturers will enjoy a banner year, including Samsung, LG, and Sony Ericsson. However, others will not. Front-runner Nokia stumbled in Q1 because of a lack of flip phones and stiff competition in the mid-tier. Nokia is likely to lose some market share over the course of the year, but will still maintain a wide lead over its nearest rival, Motorola – which has enjoyed a bit of a surge in sales lately.

For a few smaller players, 2004 brings the end, or nearly so: Alcatel will take a reduced role as it partners with China’s TCL; Korean maker Sewon Telecom filed for bankruptcy recently; and Audiovox is selling its CDMA handset business to UTStarcom.

Nonetheless, most handset manufacturers will benefit from a market with the following positives:

-- Worldwide shipments growing 10.6% year-over-year
-- A worldwide subscriber base on the rise – up 14.5% this year over last
-- Strong emerging markets in India, Eastern Europe, and Latin America
-- Camera phones with 1- and 2-megapixel resolutions available on a wider basis
-- Smartphones picking up momentum, though somewhat slowly
-- Replacement demand strong in mature markets
-- Flip phones gaining in popularity
-- Strong demand for mid-tier phones in established markets