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4 August 2009


Cell phone market returns to growth – report

After only two negative quarters prompted by the global recession, the market for mobile handsets has returned to a period of sustainable growth.

That's according to a market report from iSuppli, whose analysts suggest that shipments of phones jumped nearly 5% sequentially in the second quarter of 2009 to reach 265m units.

The report also suggests that this growth will be sustained through the remainder of 2009, with increases in quarterly shipments accelerating to 281m units in the third quarter, and to 304m in the final three months of the year.

If that forecast proves accurate, total unit shipments for the year will hit 1.1bn, representing a contraction of just under 10% on the 2008 figure. Although the market now appears to have bottomed-out, the total of 265m for the latest quarter is still 15% lower than iSuppli's figure for the same period of 2008.

Of the major phone suppliers, Korea-based LG grew fastest in the second quarter. LG's unit sales reached nearly 30m, up more than 30% sequentially, propelling its market share to 11.2%.

According to iSuppli's senior analyst Tina Teng, that strong performance was largely due to LG's successful targeting of emerging markets in the Middle East and Africa.

Teng adds that LG has been able to profit from the strong demand for high-end phones with features such as touch-screen control. GaAs component maker Anadigics, which has strong ties with LG and typically targets the high-end sector, will have benefited from this trend.

Another trend noted by Teng is a continued consolidation towards the top-five handset makers, who dramatically outperformed the smaller players in the second quarter.

Combined sales for the top five – Nokia, Samsung, LG, Motorola and Sony Ericsson in descending order – grew 12.1%. In stark contrast, the smaller players witnessed an 18.1% plunge.

Nokia, the market leader and RF Micro Devices' key customer, stretched its lead at the top of the pile. “Nokia has been defending its dominant position since the third quarter of last year due to rising competitive pressure from Samsung,” says Teng. “The company has also faced rising competition from smart phone players including Research in Motion and Apple.”

Nokia's unit shipments rose to 103.2m in the quarter, sufficient for the Finnish company to register a 2.1% gain in market share.

Samsung, ranked second, is on track to surpass its target of shipping 200m handsets in 2009, while even long-suffering Motorola enjoyed a slight increase in unit shipments compared with the first quarter of the year.

Of the top-five suppliers, only Sony Ericsson sold fewer handsets in the second quarter of 2009 than in the first. Teng attributes that to the firm's focus on the mid-range market, at a time when the fastest-growing sectors are smart phones and ultra-low-cost handsets for developing markets.

See related items:

Mobile phone market fell 11.9% in Q1/2009

Handset sales drop 8.6% in Q1, as smart-phones grow 12.7%

Handset shipments fall at record rate in Q1/2009

Mobile phone shipments to fall 8.3% in 2009

Search: Handset shipments


The author Michael Hatcher is a freelance journalist based in Bristol, UK.