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Growth Of Mobile Phones Sales Continues, But At Slower Rate

Across the globe sales of mobile phones rose 10% during the first quarter of 2007, according to research firm IDC. The 256.4 million units represent an increase over the year-ago quarter, but it's somewhat cooler than the hot sales from the fourth quarter of 2006, which were 13.8% higher. Will sales hit 1 billion again this year?

That's hard to say, but chances aren't looking so good. The slowdown in sales reverses the trends seen throughout 2006, where sales rose significantly each quarter. Even though the worldwide penetration of cell phones is right around 2.8 billion, that represents only 42% of the world's inhabitants. With cell phone use reaching saturation points in most of the world's developed countries, developing nations and regions are the best hope for continued growth.

Ramon Llamas, research analyst with IDC's Mobile Devices Technology and Trends group, said, "Since basic voice connectivity and affordability are often the key components of demand in emerging markets, device vendors, appropriately, seek to supply low-cost handsets in these markets, which, in turn, has the unfortunate effect of dragging down device ASPs. To stem the decline in ASPs, device vendors are taking steps to rationalize platforms, improve supply chain logistics, and relocate production to low-cost regions."

The top five handset vendors were unchanged in the first quarter, with Nokia, Motorola, Samsung, Sony Ericsson, and LG maintaining their market positions. Nokia bested the others by a wide marging, with 91.1 million units shipped. Motorola's 45.4 million was less than half as much.

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