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Thu, May 29, 2008 - Page 10 News List

Cellphone sales in Western Europe fall off during Q1

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Mobile-phone sales in Western Europe dropped last quarter for the first time since at least 2001 as higher costs of living crimped consumer spending, researcher Gartner Inc said.

Total unit sales slipped 16 percent to 35.9 million from a year earlier, a report by Stamford, Connecticut-based Gartner said. The global market rose 14 percent to 294 million units, with Nokia Oyj and Samsung Electronics Co, the world’s two biggest producers, taking market share from Motorola Inc.

European consumers, hurt by an economic slowdown and higher fuel prices, opted for mid-priced devices instead of more expensive ones when buying phones, Gartner said. The Asia-Pacific region led global sales growth, together with eastern Europe, the Middle East and Africa. Sales in North America rose 2.4 percent.

“While sales in emerging markets continued to be driven by strong net new subscribers’ growth, mature markets felt the pressure of an uncertain economic environment,” said Carolina Milanesi, a research director at Gartner in Egham, England.

Gartner predicted global sales would rise 10 percent to 15 percent this year, while the value of the market will be lower than Milanesi had anticipated in December. Longer contract periods have also lengthened the replacement cycle, she said.

Nokia raised its market share by unit sales to 39.1 percent from 35.5 percent a year earlier, Gartner said. Samsung increased its share to 14.4 percent from 12.4 percent, while Motorola fell to 10.2 percent from 18.4 percent. LG Electronics Co increased its share to 8 percent from 6.2 percent.

Nokia benefited from the broadest product portfolio, which ranges from entry-level phones to models with satellite navigation. The Finnish company faces tougher competition in the high-end section and needs to improve user friendliness and design of its phones, Milanesi said.

Samsung and LG, both from South Korea, benefited from demand for touch-screen models, a feature that Apple Inc introduced on its iPhone last year. Both companies also increased their market share sequentially, while Nokia and Motorola lost ground.

Motorola has “little” chance of regaining its No. 2 position and may instead fall into fifth place after LG and Sony Ericsson Mobile Communications Ltd, Milanesi said in an interview. Sony Ericsson, which lost its fourth spot to LG in the first quarter, may rebound with new devices in the second half.

“It will be a heated race between the two,” Milanesi said.

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