Mobile Phone Sales Strong in 2008, Despite Fourth Quarter: Gartner

Nokia, Samsung, LG, Sony Ericsson and Motorola all experienced a number of ups and downs in 2008, including a dismal fourth quarter, according to a new report on the worldwide handset market from Gartner. However, handset sales were up from 2008 compared to 2007, with Nokia leading all other vendors in terms of market share.

The mobile phone industry saw an increase in sales in 2008, despite a lousy fourth quarter, according to a new report from Gartner. Shipments surpassed 1.22 billion units, up 6 percent over 2007 sales.

That's the good news for companies such as market leader Nokia and other handset vendors such as LG Electronics, Samsung, Sony Ericsson and Motorola.

In the fourth quarter of 2008, however, the mobile phone industry as a whole saw a drop in sales, as consumers-who in recent years have focused much of their holiday spending on mobile phones-hesitated to commit to the contracts associated with these products.

"Consequently, mobile devices in both emerging and developed markets experienced the lowest quarter-on-quarter growth (2 percent) ever recorded in a fourth quarter," Carolina Milanesi, an analyst with Gartner, wrote in the March 2 report.

Mobile phone sales in the fourth quarter totaled 314.7 million units, which is a 4.6 percent decrease from the same quarter in 2007.

Nokia dominated market share for the fourth quarter of 2008, selling nearly 119 million mobile phones-though this was a 2.7 percent reduction from the same quarter in 2007.

Samsung had a strong finish, selling more than 57.5 million units in the last quarter and increasing market share 4.9 percent from the fourth quarter of 2007 - a gain Milanesi attributes to popular product offerings in Western Europe and in the Asia /Pacific region, and the company's quick response to a demand for touch interfaces.

A separate report released by the NPD Group March 3 found that half of smartphones on the market now have touch screens.

LG also closed strong, finishing the year in third place, with sales of more than 28 million units in the fourth quarter - a 1.6 percent rise in market share from fourth quarter of 2007.

Sony Ericsson's fourth quarter sales rose just above 23.5 million units, which is down 1.5 percent from a year ago. Motorola's final quarter numbers were just shy of 22 million units or a 5 percent market share fall from the fourth quarter of 2007.

"From the third quarter of 2008, it became clear that the economic impact was spreading to emerging markets. Sales rapidly deteriorated, making 2008 a challenging year for the entire mobile phone industry," said Milanesi.

Milanesi went on to explain that efforts to move back-logged product will continue through 2009.

"This will not mark the start of a market recovery - we do not expect demand to stabilize before 2010," Milanesi said.