Financial doldrums slowing cell phone shipments, IDC says

Nokia still well ahead overall, but smart phones are the hot area

Global cell phone shipments in the third quarter showed the effects of the worldwide financial crisis, falling significantly from previous quarters, research firm IDC said today.

IDC said mobile device manufacturers shipped 299 million handsets in the third quarter that ended Sept. 30, an increase of 3.2% from the same quarter last year, but well below the 20% increase that can typically occur as stores stock shelves for holiday sales.

Shipments and revenues for handset vendors were down almost across the board, Ryan Reith, an IDC analyst, said in a statement. Even so, Apple Inc. reported a successful quarter, and Nokia has announced a positive outlook for the entire year despite a tough third quarter, he said.

Average selling prices for mobile phones have already begun to drop, while marketing campaigns for Christmas buying go into high gear, IDC said. The research firm provided no examples.

IDC in September predicted that a total of 1.26 billion handsets would ship for all of 2008, a 10.4 % increase over 2007.

ABI Research Inc. today also predicted nearly the same number of shipments for 2008, at about 1.27 billion, more than 10.5% above 2007.

But ABI had a different take on third-quarter shipments, saying they totaled 8.2% more than the same quarter in 2007, compared with IDC's projected 3.2% increase from last year. However, ABI did not specify the total units shipped in the quarter, only the percentage of increase. ABI also revised downward its expectations for the fourth quarter, from 10.4% growth to 7.5% growth over the same quarter last year.

Despite slower growth in the overall mobile phone market, smart phones posted strong gains, IDC reported. Although it did not report smart phone results separately from others, the Apple iPhone 3G -- released in the summer -- and the recently released G1, which is powered by Android, are attracting both seasoned and first-time users, IDC noted.

Nokia took the top position again in the third quarter, with shipments greater than the next three vendors' totals combined, IDC noted. Nokia had more than 39% of market share with nearly 118 million units shipped in the third quarter; Samsung had 17% with nearly 52 million units shipped; Sony Ericsson had 8.6% with 25.7 million units; Motorola had 8.5% with 25.4 million units; and LG Electronics had 7.7% with 23 million units, IDC said.

IDC did not rank Apple or Research In Motion, maker of the BlackBerry, but ABI said Apple's share was 2.2% of all third-quarter shipments, while RIM's was 2%. ABI did not provide absolute shipment numbers, however.

Copyright © 2008 IDG Communications, Inc.

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