Worldwide Mobile Phone Market Breaks

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New product introductions, portfolio refreshes, and exciting new form factors helped spur growth in the worldwide mobile phone market during the third quarter of 2005. According to IDC’s Worldwide Quarterly Mobile Phone Tracker, worldwide mobile phone shipments rose 19.1% year over year and increased sequentially 8.8% in 3Q05 to reach 208.3 million units. Year-over-year growth increased substantially over the prior two quarters, signaling a balance against slower growth during the first half of the year. Each of the top 5 vendors within the industry reached all-time-high shipment levels and maintained the same rankings from the previous quarter.

“Last year, quarterly mobile phone shipments didn’t reach 200 million units until the end of the fourth quarter when vendors were keeping the channels’ shelves stocked for the holiday rush. As vendors announced new products earlier this year and accelerated their time to market, we’ve already reached this milestone,” said Ramon Llamas, research analyst for IDC’s Mobile Devices team.


The extensive introduction of new devices from a number of vendors in markets worldwide to fit the full spectrum of market segments fueled healthy growth in 3Q and ensured comprehensive early visibility and availability of devices for 4Q to meet the seasonal increase in demand and spending. As in previous quarters, Western Europe was a leading region with regard to new device launches.

“The dominance of the handset subsidy model and 12-month upgrade cycles in Western Europe combined with the introduction of a number of highly publicized, multimedia-oriented high-end handsets to drive demand in a mature market that is witnessing saturation of subscriber growth,” said Andrew Brown, program manager, European Mobile Devices, IDC.

However, despite sustained growth in the region fueled by the volume of new device releases quarter on quarter, IDC emphasizes the challenge facing vendors.

“As the mobile phone market becomes increasingly segmented in Western Europe, vendors are under pressure to expand their portfolios in order to comprehensively fulfill market demands with regard to air interface, form factor, technical specifications, multimedia capability, software, and ASP. Although new handsets will substantially assist market volume growth, the challenge for vendors is to meet differing segment requirements without over-extending the portfolio and adversely affecting margins,” said Geoff Blaber, research analyst for European Mobile Devic