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Mobile Phone Sales Top A Quarter Of A Billion In Q1

Nokia was the market leader, followed by Motorola, Samsung, Sony Ericsson, and LG.
Sales of mobile phones in the first quarter crossed a quarter of a billion units, driven mostly by demand in China, Japan and other Asia/Pacific countries, a market research firm said.

Shipments were 257.4 million units, up 14% compared to the same quarter a year ago, Gartner said. While sales in Asia/Pacific countries were strong, Western Europe and North America had their expected slowdown following strong Christmas sales.

With inventories dwindling, Gartner said it remained confident that handset makers would ship 1.15 billion units this year, a 16% increase over last year. Sales are expected to be driven by new phone sales in regions such as Africa, and replacement sales in emerging markets, which include Latin America and China. Mature markets such as North America and Western Europe would see a lower rate of replacements sales than in the last couple of years.

Leading mobile-phone maker Nokia sold 92 million handsets in the quarter, giving the company 35.7% of the global market, nearly double that of second-place manufacturer Motorola. Nokia increased its share in the quarter by nearly 2 percentage points over a year ago.

Nokia's multimedia product line drove sales, while sales of mid-tier range phones were boosted by sales of the new 6300 handset, Gartner said. Nokia was also successful in the enterprise market during the quarter, selling close to a 1 million Eseries devices.

Gartner expects Nokia to continue to take advantage of Motorola's current weakness in the market. Nokia is scheduled to expand its portfolio this year with the addition of the 2630 phone and the Navigator.

Motorola continued its slide in the first quarter, as its market share fell to 18.5% from 20.3% a year ago. The company shipped 47.6 million units. Motorola built a considerable amount of inventory in markets such as Asia/Pacific and Western Europe in the second half of last year, resulting in much lower than expected sales into the channel.

Gartner expects Motorola to have a difficult second quarter, but the second half of the year looks more promising with new products, such as the Razr2, set to hit the market. "The challenge for the company will be to make the Razr2 as successful as its predecessor," Gartner analyst Carolina Milanesi said in a statement.

Rounding out the top five vendors were Samsung with a 12.5% market share, Sony Ericsson, 8.4%, and LG, 6.2%. Samsung's share was unchanged from a year earlier, while LG posted a slight increase. Sony Ericsson registered big jump from 5.8% of the market last year.

Sony Ericsson's performance was driven mostly by successful products across the high end to the low end. The company registered strong growth in Asia/Pacific, Latin America, and Western Europe.