Handset Market Increases to 107 Million Units

Europe : In Q2 2003, the total handset market increased to 107 million units, demonstrating a marginal increase of 2% sequentially and 12% growth year-on-year, according to findings by technology market research firm ABI. Nokia continued to lead the market with a 38% market share. ABI believes that the surge in handset shipments
is fueled by new features like color screens and camera phones, and that replacement shipments account for nearly two-thirds of all handsets shipped.

Nokia shipped over a third of its shipments with color screens, and Samsung clocked a 45% penetration with color screens among its shipments. ABI estimates that this trend will continue, and color screens will account for about 97% of all shipments by 2008.

Sony Ericsson had a dramatic comeback with 6.7 million handset shipments, grabbing the fifth position from LG Electronics. Interestingly, the company's ASP (average selling price) also rose from $167 to $190. However, while Nokia and Sony Ericsson showed growth in shipments sequentially, Siemens showed no improvements, with shipments at 8.1 million units and the lowest ASP among the top handset makers at $130. ABI continues to believe that ASPs will come under increased pressure, despite additional handset features.

Motorola, slow to respond to the demand for replacement handsets sporting new features, introduced few new handsets this year. This partially explains the company's weak second quarter results, with handset shipments down to 15.8 million units. The company has also faced increased competition from Chinese vendors, as well as the effects of large inventories that the region has experienced.

ABI estimates that nearly 3.6 million units of smartphones and smartphone-PDAs were sold in Q2 2003, representing about 3.3% of the overall handset market.

Further information on handsets is available through ABI's Wireless Handset Subscription Service. The service outlines the evolution of the handset to a multimedia and data-centric platform and the progression to the 2.5G and 3G networks. ABI provides a thorough examination of trends in the global market for wireless handsets and offers a realistic outlook on where the industry is headed.