iSuppli Raises 2006 Mobile Phone Forecast, as Samsung and Motorola Beat Seasonal Downturn

Tekrati Research News picks up a new forecast from iSuppli that finds "in light of the mobile-phone market's strong first quarter 2006 performance, iSuppli is raising its forecast for 2006 to 932 million mobile-phone shipments. The forecast is up by 32 million units. This represents growth of 13.7 percent, compared to the analysts' previous forecast of 9.8 percent."

According to iSuppli, "factors driving increased shipments include an expected doubling in shipments of EDGE phones and a nearly two-and-a-half times increase in W-CDMA phone production compared to 2005." The firm noted that "worldwide mobile-phone production in the first quarter amounted to 220 million units, down 9.5 percent from 243 million units in the fourth quarter of 2005." While handset "shipments typically decelerate in the first quarter following the holiday selling season in the fourth quarter," iSuppli said "the first quarter was actually a robust period for the mobile-phone market, with shipments rising 26.1 percent compared to the first quarter of 2005."

According to iSuppli, the top six mobile makers in Q1 2006 were Nokia, Motorola, Samsung, LG Electronics, Sony Ericsson, and BenQ-Siemens. "Number-three handset maker Samsung achieved the best performance among the top-six players, with its unit production rising by 6.6 percent. The South Korean company produced 29 million mobile phones in the first quarter, up 1.8 million units from 27.2 million in the fourth quarter."

Tina Teng at iSuppli said, "Samsung's rise in production didn't come as a major surprise. The company's shipments were depressed by inventory-control efforts in the fourth quarter-and once those were completed, its production accelerated."

Motorola's market share "rose to 21 percent, up 2.6 percentage points from 18.4 percent in the fourth quarter of 2005. Motorola in the first quarter was just 13.1 percentage points behind Nokia, compared to 16 points in the fourth quarter. The U.S. mobile-phone maker extended its lead over Samsung to 7.8 percentage points in the first quarter, up from 7.2 in the fourth quarter. The company's shipments rose to 46.1 million units in the first quarter, up 1.4 million from 44.7 million in the fourth quarter."

Regarding declining Average Selling Prices (ASP), Scott Smyser at iSuppli said, "The overall ASP erosion among the top phone makers reflects a major shift in the mobile-phone market. The attraction of emerging markets in China, India and Brazil is encouraging phone makers to enter the market for low-cost handsets, which are popular among low-income consumers in those regions. While the rising production of inexpensive models caused a decrease in overall revenue, it is being offset to some degree by increased shipments of higher-end feature-rich or 3G phones."