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Cellphone sales seen growing 10 pct in 2007

Written by: Staff

AMSTERDAM, Nov 22: Global sales of mobile phones are set for another year of strong growth in 2007, with estimated consumer demand for 1.1 billion handsets, according to a survey on Wednesday.

''We expect just over 10 percent growth in 2007,'' said analyst Carolina Milanesi at research group Gartner after releasing third-quarter sales data and forecasts.

Inventories built up over 2006 may skew next year's shipments, however. In China and India in particular, there is a bottleneck in distributing handsets to final distribution outlets in smaller cities, she said.

Gartner raised its 2006 outlook to 986 million mobile phones sold to consumers, up from an earlier 960 million and up 21 percent from 817 million units sold in 2005.

Originally, Gartner and most other industry observers had predicted growth of 10 to 15 percent in 2006, but this proved too modest as a result of soaring demand from first time mobile phone buyers in emerging markets like China, India and Africa.

Mobile phones are by far the world's most popular consumer electronics device, followed by personal computers (PCs) and televisions each with annual unit sales of around 200 million.


Still, growth is reaching its limits in mature markets such as Japan and Western Europe where almost every adult carries a mobile phone and official mobile phone subscriber numbers are more than 100 percent, which means many adults have more than one mobile subscription.

In Europe, the number of phones sold to consumers in the third quarter rose only 1.9 percent compared with the year-ago period. In Japan sales even slipped a little, Milanesi said.

''That's what the industry may be facing: stable volume sales in mature markets,'' she said.

This is a threat to handset makers, because just like any other consumer electronics product the price per phone falls every year.

Without volume growth in mature markets to make up for that loss, handset makers will have to convince consumers to buy a phone with more advanced features.

''Vendors will try to increase features and sell the phone for the same price as last year's model without the features,'' Milanesi said.

Even in emerging markets, Gartner found first time mobile phone users had already started to upgrade their entry-level handsets of or less, to models with more features such as cameras, colour screens and web surfing software.

Overall, however, the average price per handset sold worldwide will continue to decline as mobile carriers continue to build out networks in countries with low personal incomes and the number of cellphone subscribers approaches three billion.

Following are the third-quarter unit sales (in millions of units) to consumers and market shares (in percentages) of the world's top six mobile phone makers -- unlike other market research groups Gartner measures sales to end-users instead of vendor sales to distributors: Q3 2006 mkt share % Q3 2005 mkt shr % Nokia 88.1 35.1 67.2 32.5 Motorola 51.9 20.6 38.6 18.7 Samsung 30.6 12.2 25.9 12.5 Sony Ericsson 19.4 7.7 13.8 6.7 LG 15.0 6.0 13.5 6.5 BenQ Mobile 6.1 2.4 9.9 4.7 Others 40.2 16.0 37.9 18.3 Total 251.3 100.0 206.8 100.0


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