Gartner Dataquest Says Worldwide Mobile Phone Sales Increased 46 Percent in 2000

SAN JOSE, Calif., February 15, 2001 — Worldwide mobile phone sales totaled 412.7 million units in 2000, a 45.5 percent increase over 1999 results, according to Dataquest Inc., a unit of Gartner Group Inc. (NYSE: IT and ITB). Despite some "hiccups" within the industry and its key supply channels, overall shipments continued to perform well throughout 2000.

"However, persistent rumors of a market slowdown that dogged the industry throughout the year started to prove true toward the end of 2000," said Bryan Prohm, senior analyst for Gartner Dataquest's worldwide telecommunications group. "The afterburners that propelled several years of consistently high growth rates now suddenly seem to have been switched off. Indeed, there is some significant stock carry-over to the beginning of 2001, meaning the number of total shipments in 2000 was about six million units lower than previous estimates."

Nokia strengthened its lead as the No. 1 vendor in the market during 2000 with shipments growing 66 percent over 1999 (see Table 1). Some of the company's success was attributed to a strong second half in 2000 when 59 percent of sales occurred.

Table 1
Worldwide Mobile Phone Sales Estimates for 2000 (Thousands of Units)
Company 2000
Shipments		 2000 Market
Share (%)		 1999
Shipments		 1999 Market
Share (%)		 Growth (%)
Nokia 126,369 30.6 76,335 26.9 65.5
Motorola 60,094 14.6 47,818 16.9 25.7
Ericsson 41,467 10.0 29,785 10.5 39.2
Siemens 26,989 6.5 17,687 6.2 52.6
Panasonic 21,511 5.2 15,581 5.5 38.1
Samsung 20,639 5.0 12,982 4.6 59.0
Others 115,662 28.0 83,393 29.4 38.7
Total Market 412,731 100.0 283,581 100.0 45.5
Source: Gartner Dataquest (February 2001)

Gartner Dataquest analysts said 2000 was a transitional year for the mobile phone industry, and they identified a number of issues that affected growth in the industry. Global capacity caught up with demand. Lowered barriers to entry allowed an influx of smaller manufacturers that were able to exploit demand in some of the key Far Eastern markets, such as China. Wireless application protocol (WAP) failed to impress increasingly savvy mobile users, and thus what had been anointed as the catalyst for the next wave of terminal sales growth turned out to be a little more than a ripple. Finally, mobile operators began to shift attention away from straightforward subscriber acquisition to a greater focus on lifetime customer loyalty.

"The long-term prospects for the mobile sector look tough," said Peter Richardson, principal analyst for Gartner Dataquest's worldwide telecommunications group. "Few manufacturers are able to generate healthy profit margins, placing the necessary investments in next-generation handsets developments at risk. The smart money may be riding on players that are unfamiliar with the upper echelon vendors."

Gartner analysts will provide additional analysis on the mobile and wireless world during the Wireless Access, Mobile Business 2001 conference, March 26-28 at the Sheraton San Diego Hotel and Marina in San Diego, California. Gartner analysts will help identify the risks, rewards and realities of the new mobile millennium and help position businesses to win big in the evolving wireless world. Additional information on the conference is available at www.gartner.com or by calling 1-800-778-1997.

This research is published by Gartner's worldwide Telecommunications and Networking group. This group provides analysis for the full spectrum of telecom and networking issues. To keep up to date on the latest telecommunication issues, please visit Gartner's Telecom Marketplace Resource Center at www.gartner.com. To purchase reports or subscribe to Gartner Dataquest programs, please call 800-419-DATA, or 408-468-8009.

Gartner Dataquest is the recognized leader in providing the high-technology and financial communities with market intelligence for the semiconductor, computer systems and peripherals, communications, document management, software, and services sectors of the global information technology industry.

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