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Billion Phone Goal Missed By A RAZR Edge |
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Written by Adam Gosling
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Tuesday, 06 March 2007 |
It was supposed to be the first year mobile phones sales reached a
billion units. It came close but missed by a RAZRs edge. Now it may
never happen. Can the mobile phone market sustain another billion unit
year?
Sure, all the pundits are predicting another 12 per cent growth
this year, with Analysis putting the 2007 estimate at 1.14 billion.
Gartner's own number is a little higher at 1.2 billion. But the pace of
growth was showing signs of slowing in the final Quarter of 2006 and
with market leaders Motorola and Nokia now so far ahead of the field
its no surprise we are seeing a strategy change.
Last week
Motorola Chairman and CEO, Ed Zander, announced the company was no
longer going for gold when it came to handset sales. The new strategy
he said is "not about
market share any more". It's no wonder when you look at the way Nokia
and Motorola have ripped through the marketshare rankings in 200-6.
According
to the Gartner figures Nokia's share grew from 35% to 36.2% per cent
a year earlier. Motorola grew form 17.8% to 21.5%. None of the other
companies fared very well, with BenQ possibly suffering the most, which
is not surprising.
But
all that growth came at a cost, which is why Zander says Motorola will
be singing a new tune in 2007. Motorola has achieved its healthy
marketshare through deep discounts on its ever popular RAZR phones and
while that's allowed the company to get closer to Nokia, Zander now
remembers the point of being in business is to make money.
Apparently
Motorola has had a secret company mission to become number one in the
cell phone market but that's looking increasingly hard and since the
company missed its latest earnings estimates, Zander has had to refocus
the company on profit rather than share.
"I think we got carried away with being No. 1," Zander was quoted saying.
So
although the final Quarter of 2006 saw 21 percent growth over the
equivalent 2005 quarter, to record 284.2
million units sold for the three months to Christmas, that rate of
growth was actually levelling off and nobody is predicting another 20
plus percent year in 2007.
Emerging
markets India and China saw new handset owners at the rates like 10
million a month for much of the year. To reach a billion phones in a
year is just short of 3 million a week. Meanwhile users in mature
markets such as Europe and North America pocketed upgrades favouring
slim phones from Motorola and multimedia handhelds from Nokia.
It managed to take the market to over 990 million units for the year - 21.3% up from the 816.6 million units sold in 2005.
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