Strategy Analytics: Global Mobile Phone Shipments Will Reach 1 Billion Units in 2006

According to Strategy Analytics, "global mobile phone shipments grew an impressive 31 percent year-over-year, to reach 229 million units during Q1 2006." Due to this strong performance, the firm upgraded "its global mobile phone shipment forecast to 1.00 billion units for the full-year 2006."

Neil Mawston at Strategy Analytics said, "Total global handset shipment growth of 31 per cent annually, driven largely by emerging markets such as India, is at its highest rate for almost two years. We expect strong demand to continue throughout the coming months and we forecast that full-year sales will reach a record 1.00 billion units worldwide by the end of 2006 - this represents 22 per cent growth from 817 million in 2005."

Chris Ambrosio at Strategy Analytics added, "It is important to note that strong shipment growth is not equating to healthy profits for all vendors. Motorola was the star performer in terms of volumes, but the growing need to compete in low-cost markets adds fuel to the theory that it has reached its profits-ceiling. Samsung and LG are also both feeling this profit pressure. This is a strong illustration of the need for design and platform balance, in order to maximize profits as a global competitor. Otherwise, profits rest in niche products aligned to emerging mobile data demands, as demonstrated in Sony Ericsson's recent strong quarter."

Other keys findings include:

• The share gap between Nokia (33 per cent) and Motorola (20 per cent) stands now at 13 points, down from 19 points in Q1 2002;
• LG opened up a 1 point share gap over Sony Ericsson at the cost of profitability, struggling to balance growth with carrier-customization demands.

Exhibit 1: 2006 Global Shipments and Market Share Estimates - Top 5 Vendors

Global Sell-In ( M )	Q1 '05	2005	Q1 '06
Nokia	53.8	264.9	75.1
Motorola	28.7	146.0	46.1
Samsung	24.5	102.9	29.0
LG	11.1	54.9	15.6
Sony Ericsson	9.4	51.1	13.3
Others	46.6	197.2	49.8
Total	174.1	817.0	228.9
Global Share	Q1 '05	2005	Q1 '06
Nokia	30.9%	32.4%	32.8%
Motorola	16.5%	17.9%	20.1%
Samsung	14.1%	12.6%	12.7%
LG	6.4%	6.7%	6.8%
Sony Ericsson	5.4%	6.3%	5.8%
Others	26.8%	24.1%	21.8%
Total	100.0%	100.0%	100.0%
Total Growth YoY	10.8%	20.1%	31.4%