Dataquest Reports a Major Shakeup in the U.S. Digital Handset Market

Ericsson and Nokia Move Past Motorola in the Marketplace

San Jose, Calif., February 26, 1997—The United States digital handset market is beginning to evolve into a significant market for cellular phone manufacturers as the digital handset market grew 73 percent in 1996, according to Dataquest. Ericsson and Nokia were the big winners in the market with unit shipments that moved them into the No. 1 and No. 2 positions, respectively. Motorola suffered as it dropped from being the No. 1 vendor in 1995 to the No. 3 vendor in 1996.

"Ericsson patiently waited for the digital market to heat up, forecast demand accurately, and priced its phones well," said Clint McClellan, industry analyst for Dataquest's Personal Communications program. "Nokia also fared well, but its slightly higher prices tipped the scale in Ericsson's favor. The greatest problems that Motorola faced were delays in product launches and aging form factors. While we expect Motorola to rebound in 1997, it may never dominate the U.S. digital market again."

Ericcson showed the strongest growth in 1996 with a 184 percent increase in shipments over 1995 (see Table 1). Nokia also did very well in 1996 with 99 percent growth in shipments, and Mr. McClellan said that QUALCOMM made a fine showing as the new player in the market.

Table 1
Total U.S. Digital Handset Unit Shipment Estimates
(Thousands of Units)

               1995   1995 Market        1996   1996 Market   1995-1996 
Company   Shipments	 Share (%)   Shipments	  Share (%)  Growth (%)
Ericsson        286          34.0          812        55.7         184
Nokia           242          28.8          482        33.0          99
Motorola        305          36.3          117         8.0         -62
QUALCOMM          -           0.0           42         2.9           -
Others            8           0.9            5         0.3         -37
Total           841         100.0        1,458       100.0          73
Note: Columns may not add to totals shown because of rounding.
Source: Dataquest (February 1997)

The Dataquest Market Analysis Perspective, Ericsson and Nokia Displace Motorola in U.S. Digital Handsets [ ], provides further analysis of the U.S. cellular market, including complete market share information for the past three years. The markets covered are the U.S. digital handset market, the U.S. cellular TDMA handset market, as well as the U.S. PCS 1900 handset market.

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Dataquest, founded in 1971, is a global market research and consulting company serving the high-technology and financial communities. The company provides worldwide market coverage on the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the information technology industry. Dataquest is a GartnerGroup [ ] Company.