High-End Handsets to Drive Western Europe Mobile Phone Market

According to IDC, the Western European mobile phone market is experiencing healthy growth 2005 and the firm predicts the market to grow by 11 percent for the year. This trends is being "predominantly driven by increased traction in low-end segments and renewal demand for new feature-rich handsets."

Geoff Blaber at IDC said, "The sustained advancement in technological specifications is further shortening product life cycles and providing consumers with the necessary incentive to upgrade handsets, while providing vendors with new opportunities to position devices as converged multimedia solutions, and cooperatively brand handsets to leverage brand strength from parallel markets such as imaging and music."

One of fastest growing markets is converged multimedia devices which now represents 7 percent of the total market. IDC claims "technological features and form factor rather than software remain the primary decision criteria for most users, with the Nokia 6230i, Sony Ericsson K750i, Motorola RAZR, and Samsung E720 all witnessing strong demand in 2Q contract renewals."

IDC expects upgrading to 3G and new handsets released towards the end of the year will help drive the 11 percent growth for the year.

In particular those orientated towards multimedia and positioned as converged music solutions such as Sony Ericsson’s Walkman range, Motorola’s collaboration with Apple, and Nokia’s N91 are devices likely to capture consumer demand, particularly in the high-volume final quarter. Furthermore, with additional Series 60 smart phones such as the N series anticipated in 2005 and the first Windows Mobile 5.0 devices such as the WCDMA HTC “Universal,” the converged device market is predicted to grow 87% year on year. IDC further predicts that the impetus provided by increased consumer spending during the Christmas build-up will increase WCDMA’s proportion of the mobile phone market to 14%.

IDC also reviewed the first half performance of the top handset manufacturers with Samsung making the largest gains while Siemens taking the biggest hit...