A new report from Gartner confirms Nokias position as the top mobile phone vendor, although Motorola continues to make a strong second-place showing.
For the second quarter in a row, Nokia has sold more than 100 million units into the channel worldwide, and accounted for nearly 37 percent of worldwide sales during the second quarter of 2007.
Nokias strong showing is evidence that it is doing a lot right, including a heavy push into emerging markets as well as maintaining a strong showing in mature markets. Nokias dominance is likely to continue through the rest of the year, the report notes.
“Nokia has done a good job of remaining fresh. It has the broadest product line of any cell phone manufacturer, with hundreds of models, and there is literally something in the product line for everyone. I think they will stay number one for the foreseeable future,” said Craig Mathias, principal of Farpoint Group, an Ashland, Mass., mobile consultancy.
Whats more, Nokias focus on building its brand in emerging markets, combined with strong distribution networks and an ability to produce low-cost devices, has created a force to be reckoned with, said Hugues De La Vergne, lead mobile phone analyst for North America at Gartner.
Motorola maintained its second position with a 14.6 percent despite the fact that its product portfolio is somewhat dated, the report said. But by aggressively pricing its phones, the company was able to rid itself of outdated inventory. However, if the company is to maintain its second-place market share, it would do well to radically update the portfolio, the Gartner report noted.
Click here to read more about the deal Nokia signed with Microsoft for a Windows Live trial service.
Its unlikely, though, that Motorola will maintain its number two standing, De La Vergne said, mainly because the Razr, its premier phone, has outlived its usefulness.
“They werent able to follow up the Razr with another iconic product and have become too reliant on that form factor,” he said. “It takes more than 12 months to get a new product to market, so these changes they are implementing wont be felt overnight.”
“They got a really good run out of the Razr, but there is only so far you can go with it,” Matthias said. “To keep going in the right direction, they have to do the style and market research to find out what consumers really want, and then get cost out of the product as it goes into mass manufacturing.”
Samsung, in third place with a 13.4 percent market share, continued strong sales and is gaining rapidly on Motorola. Thats due in large part to its Ultra II family of products, which focus on cutting-edge features like music and video, but to move ahead, the company should create more design differentiation.
Sony Ericsson, with a 9 percent market share, sold 24.3 million units, with several products aimed at the high-end and midrange market. To grow moving forward, Gartner recommends that the company do whatever it takes to ensure that sales of mid- and higher tier phones stay strong.
Read more here about Nokias introduction of energy saving phones.
LG was the fifth-place finisher, with a 6.8 percent market share. The company has been very aggressive with new models of its Chocolate phone, as well as other phones in other areas of the world, but it will fight an uphill battle to increase market share against its competitors, the report said.
As for future standings, Matthias believes the next frontier—the ability to support a higher end web experience, thanks to the influence of the iPhone and user demand—will be the deciding factor.
“A lot of it will depend on how well they can map the desktop onto devices, and that means figuring out how much functionality should actually go on the phone,” he said.
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