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Analysis

Q2 Handset Market Share

Posted by on 08.25.05 | 1 Comment

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Gartner’s come out with its assessment of the second-quarter handset market, and there aren’t any surprises, really: Nokia and Motorola continue to eke out gains, while Samsung continues to drop, along with Siemens.

Most stories compare the current quarter’s results to the same quarter last year; I think that looking at last quarter’s share percentages provide a better idea of a company’s momentum and recent execution against its rivals. For instance, in the second quarter of 2004, Samsung had 12.1% share, while in this quarter, it has 12.8%. Those figures mask the fact that the company lost half a point of share from the first quarter of this year.

So here’s how things look comparing this quarter to last quarter:

Company Q205 Share (%) Q105 Share (%)
Nokia 31.9 30.4
Motorola 17.9 16.8
Samsung 12.8 13.3
LG 6.5 6.2
Sony Ericsson 6.2 5.5
Siemens 4.7 5.5
Others 20.0 22.3

The biggest movement is from Nokia and Motorola, which are consolidating their lead at the top of the pack. The is reflective of a wider trend of consolidation — the share of companies outside the top 6 dropped by a couple of points. Nokia’s price cuts and the low end and the filling out of its mid-tier look to be helping, while Motorola continues to ride the popularity of just one model — the RAZR. Sony Ericsson, too, looks to have its latest reincarnation of the T610 midrange handset in the K750. Samsung, though, keeps falling. My guess would be that consumers are tired of its one-trick-pony approach to handset design and turning away from its ever-present silver clamshells.

I guess it’s a little late to be outlining the challenges for the manufacturers for the third quarter, since it’s nearly over, so we’ll say the challeges “going forward”: Nokia’s got to continue filling in its product line, not the least of which the middle and low tier and in 3G, where it’s only got 17% of the market. While the N series and 8800 are nice phones, they’re just too expensive to move in mass quantities.

It’s a similar story for Motorola: it’s been riding the RAZR for a good while now, but where are the rest of its hot new designs? The delay of the iTunes phone has been well documented, and all the signs says that when (if?) it ever comes out, it’s going to be a real disappointment, a real step back in looks from the RAZR. There’s supposed to be a slew of models to follow in the RAZR’s footsteps, in terms of both design and annoying names, but they better get a move on lest somebody else seize the Motomomentum.

Samsung’s got to find some new designers. The silver flip stuff has gotten old, and their other designs — or rather their other design, the slider — doesn’t inspire much confidence. Sony Ericsson is well-placed, with the aforementioned K750, and it will be looking to get a boost from its Walkman range. Sometimes I get the impression SE doesn’t mind being a minor player in the market: I think its products are generally pretty solid, and it’s got some hot models in Japan it could adapt for the West that would go over very well. One final question mark is what will happen to Siemens’ market share, as it’s hard to see BenQ hanging on to it.

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