Worldwide mobile shipments grow over 15 per cent in second quarter 3 August, 2008 By Vanessa Ho

IDC noted that vendors shipped a total of 306 million units, an increase of 5.6 per cent from the 289.7 million units shipped during the previous quarter and up 15.3 per cent from the 265.4 million units shipped during the same quarter last year. Total shipments for the quarter were in line with IDC's expectations, even as vendors cited economic challenges and changing demands within key regions.

"Since the start of the year, vendors have been wary of the potential decrease in demand for mobile phones," stated Ramon T. Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends Team. "[But] that has not stopped vendors from experimenting with and releasing a host of mid-range and high-end devices with GPS, touch screen and multimedia. This also goes for hotly contested emerging markets, where vendors are introducing phones that offer features in addition to voice telephony. Reception towards these devices has been warm, and as we head into the holiday quarter, demand for these and other devices will no doubt increase."

Converged mobile devices, also known to the industry as smartphones, have typically been the category of handsets incorporating higher-end features such as GPS and touch screen. However, these features have quickly moved onto handsets further down the food chain such as the feature phone.

IDC noted that smartphones are still seeing growth rates hovering around 40 per cent year-over-year, while the rest of the industry is growing at roughly 10 per cent.

"Grouping the rest of the handsets into one category is doing the industry no justice," said Ryan Reith, senior research analyst with IDCs Mobile Phone Tracker, in a statement. "The rise of the feature phone has created a battle at the high-end of the market, with the main difference between smartphone and feature phone being the high-level operating system. We expect the competition at the high-end will help drive growth within the market and help move volume to higher-end devices."

Nokia was noted by IDC as one of the top five mobile phone vendors with growth of 21 per cent from a year ago. The report noted that the company's relentless focus on and ability to meet demand within emerging markets helped propel shipment volumes forward.

Samsung maintained its position as the number two handset vendor worldwide. Year-on-year growth of 22 per cent was quite strong, even though it was slower in recent quarters and meant a slight decline in volume from the previous quarter. Affecting the company's performance the most was a combination of greater competition for mid-range and high-end phones, economic slowdown and weak second quarter demand.

Motorola came in third and recorded a slight increase in shipments from the previous quarter despite troubles behind the scenes such as another top executive leaving the fold. LG Electronics reinforced its position as the number four mobile phone vendor worldwide with shipments reaching a new record high with 27.7 million units shipped.

The fifth mobile phone vendor in the world, Sony Ericsson, sustained another tough quarter, citing soft demand in Europe, increased price competition and a product portfolio that did not meet expectations. For the second quarter of 2008, Sony Ericsson had 24.4 million units shipped, which was a two per cent decrease over the same period a year ago.

Regionally, despite rising food and oil prices, mobile phone growth in the emerging markets of Asia/Pacific continued to be robust. Volumes in Europe, the Middle East and Africa (EMEA) rose modestly compared with the first quarter, and saw healthy growth from a year ago. In Western Europe, LG and Samsung increased market share with new line ups of medium and low-end products, while in the emerging markets of Middle East and Africa growth continued to be driven by sales of Nokia's entry level phones.

In Latin America, mobile phone shipments continued to show positive growth. With the recent and continuous migration to newer networks and new services offered by carriers throughout the region, the main strategy for vendors and carriers in 2008 has been to promote and convince current users to migrate from low-end phones to more complex feature phones. In response, vendors launched a number of new models during the quarter

In North America, mobile phone shipments experienced a healthy lift from last quarter, with vendors introducing a number of feature phones ahead of the much anticipated iPhone 3G. At the same time, the converged mobile device market grew faster than the overall mobile phone market and accounted for nearly a fifth of total mobile phone shipments.