04 Feb 2009
FRAMINGHAM, Mass. February 4, 2009 – The worldwide mobile phone market experienced an unusual downturn in the normally robust fourth quarter of 2008 (4Q08). According to IDC's Worldwide Mobile Phone Tracker, vendors shipped a total of 289.0 million units, 12.6% lower than the 330.8 million units shipped during 4Q07. For the full year 2008, vendors shipped a total of 1.18 billion units worldwide, 3.5% greater than the 1.14 billion units shipped during 2007.
- Nokia gave early indications that 4Q08 would be a challenging quarter due to the economic downturn, and by quarter's end its sales for devices and services had declined nearly 27% from the previous year. In addition, Nokia took the step of reducing headcount in order to lower overall costs. But during these difficult times, Nokia spelled out the need to innovate and grow. To do this, Nokia will continue to bring the Internet onto mobile devices while also developing five interconnected services – maps, music, messaging, media, and games – for its handsets.
- Samsung experienced lower sales than expected due to the global recession and saw its operating margin suffer. Despite these results, the company had strong demand for the products where it had invested its resources, particularly touchscreen-enabled phones and converged mobile devices in developed markets as well as mid-range camera phones in emerging markets. These three product segments will continue to be the company's key focus in 2009 along with improving cost competitiveness.
- LG Electronics climbed into third place for the quarter and for the year, both milestones for the company. But, due to sales declines within key markets, its profit margins slid back down into the single digits for the first time since 4Q07. Looking ahead to 2009, the company will emphasize digital convergence on its handset portfolio, and will launch ten new models, including an Android phone by 2Q09. In addition, its new low-tier platform will enable the company to compete aggressively within low-end markets.
- Sony Ericsson slipped to fourth place during the quarter, citing lower profitability due to ongoing corporate restructuring, higher expenses related to sales, and a less favorable product mix. Even with these negative results, the company made significant investments to compete in the coming months, most notably announcing its participation with the Open Handset Alliance (OHA) to build its converged mobile device portfolio. Next, Sony Ericsson plans to build on its expertise in music and imaging as well as harnessing the Internet to bring more integrated mobile entertainment devices. Finally, Sony Ericsson will expand its services arm now that it has launched its music service PlayNow in Sweden.
- Motorola ended the quarter in fifth place, posting another quarter of operating losses driven not only by the global economic crisis, but also due to its ongoing restructuring and gaps in its product portfolio. While this is the latest chapter in Motorola's slide in the market, Co-CEO Sanjay Jha pointed out the progress made in terms of cost reduction and platform rationalization, and spoke highly of its converged mobile device innovation around Android. Moving forward, Motorola will focus its efforts on mid-range and high end devices within the Americas and China, a major departure from the company's strategy just two years ago.