Mobile phone market on the decline in Western Europe

 

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Posted on 8 Sep 2003 at 12:19

The mobile phone market is struggling to grow in Western Europe, according to the latest research. Shipments have declined by 2.4 per cent year-on-year in the second quarter of 2003.

Although previous research had indicated that camera phones were boosting the European mobile market, the latest findings from IDC paint a less positive picture. It says the second quarter of 2003 has been a slow three months for both renewals and generating new subscribers.

'Although leading vendors have become increasingly adept at lowering their cost base and targeting end-users, increasing saturation means that new technologies are failing to stimulate greater demand among new subscribers for mobile phones in Europe, in what has essentially become a highly competitive renewal market,' commented Andrew Brown, program manager for European Mobile Devices at IDC.

The relative winners, based on unit shipments, appear to be Nokia and Samsung. These have made slight gains of 3.5 and 4.7 per cent respectively on the same period a year ago. Motorola, Siemens and Sony Ericsson saw their market share decline.

In the case of Sony Ericsson, a dramatic year-on-year fall of 20.4 per cent some hides sequential growth. IDC points out that that Sony Ericsson has recently announced a range of feature phones this week, including the imaging, messaging and gaming phone, the Z600 (pictured), and it believes the company's performance should improve in the next six months.

In terms of 3G handsets, third-generation handsets only accounted for one per cent of mobile phones shipped in Western Europe. It is still early days, of course, but it seems NEC is the only vendor shipping in significant volumes. 'Handset growth should be driven by next-generation phones, which feature-hungry consumers are likely to include in their upgrade plans when the benefits are proven to them,' said Matthew Dunn, research analyst for European Mobile Devices at IDC.

The conclusion that IDC draws is that vendors - despite offering a more diverse range of products - are facing an increasingly tough market. The days of the market being driven by new subscribers have been replaced by a battle for mobile phone replacements.

See also:

Europeans fall back in love with the mobile

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