Nokia: Down but not out

The mobile market is in rude health, with beleaguered handset behemoth Nokia to come out fighting while the other vendors scrap it out for second place, according to new research published today.

Analyst house IDC's report into the global mobile market, Worldwide Mobile Phone 2004-2008 Forecast and Analysis, predicts that despite a seasonal tailing-off of sales in the first quarter of this year, the outlook is far from bleak, with year-on-year growth in handset sales rising by 29.3 per cent to around 153 million units.

While Western Europe has practically reached saturation point in terms of new mobile subscribers, the attraction of the camera phone and colour screen is proving enough to get consumers upgrading regularly enough to keep the accountants happy.

The colour-and-camera combo looks to be causing handset leader Nokia a few problems. With a lack of mid-range handsets, the company is losing out on market share. The report calculates the drop is 4.8 per cent, leaving Nokia holding 29.3 per cent of the market.

But is the mighty Finn really suffering? IDC's perspective is 'down but not out' for the handset vendor.

Andrew Brown, program manager for European mobile devices at IDC, said: "When you're the dominant leader, it's difficult to grow by a large amount anyway. [Nokia] will continue to focus on efficiently targeting the segments it has so far." Brown added that while the product mix lacks enough mid-level phones, "they've gone off the boil this quarter but it's not necessarily a problem – they won't suddenly be toppled."

The pretenders to Nokia's throne are making a strong challenge though, with Motorola and Samsung fighting to pick up the mid-level handset slack.

Motorola, in second place, managed to bump up its market share by 2.7 per cent to 16.6 per cent, with Samsung also seeing a rise, hitting 13.1 per cent of the market, by focusing on consumers' most-wanted clamshell design.

The smart-phone-centric vendors have a reason to be cheerful, according to the research, with year-on-year growth beating the 85 per cent mark and 20 million handsets shipped last year.

Brown said: "There's no doubt that [smart phones] are still a relatively small piece of the market but, going forward, people will see an increasing importance. The technology is moving fast."