GartnerGroup's Dataquest Reports U.S. Digital Handset Market Grew 283 Percent in 1997

San Jose, Calif., August 17, 1998—The U.S. digital handset market experienced explosive growth in 1997 as shipments reached 5.636 million units, a 283 percent increase over 1996 shipments of 1.473 million units, according to Dataquest, a unit of Gartner Group, Inc. (NASDAQ: GART). Ericsson continued to lead the market with 41 percent market share, but it suffered from not having a presence in the IS-95 CDMA market. For vendors to achieve long term success in the U.S. digital handset market, they will need products in all segments.

"The fragmentation of the U.S. handset market has yielded a situation where today no single vendor has a complete digital phone portfolio," said Matt Hoffman, senior analyst and program manager for Dataquest's Mobile Communications Terminal Devices North America program. "Several vendors, including Nokia and Motorola, do have plans to participate in all technologies. Those vendors with complete product lines will be able to more fully leverage their investments in brand building and distribution."

Qualcomm, Samsung, and Sony experienced the strongest gain in market share in 1997 (see Table 1). Dataquest attributes the increase in market share for these three vendors to their presence in the CDMA market, which grew from 3 percent of the U.S. digital market in 1996 to 33 percent in 1997.

"While IS-136 TDMA and GSM still represent significant market opportunities for vendors, looking forward, IS-95 CDMA is expected to be the largest segment comprising 52 percent of the U.S. digital market by 2002," said Mr. Hoffman.

Additional information on the U.S. handset market is available in the Dataquest Market Statistics report Mobile Communications Terminal Devices North America. This report includes historical data from 1993 to 1997, 1997 market share estimates, 1997 cellular/PCS subscribers and operator revenue by technology, and 1997 factory handset shipments and revenue by technology.

This report is produced by Mobile Communications Terminal Devices North America program [ http://gartner5.gartnerweb.com/dq/static/offer/programs/mobd-na.html ]. This program provides detailed actionable analysis of developments in the mobile communications terminals sector and the fast-changing distribution channels through which they reach the market. Additional information on this program is available on Dataquest's Web site at http://www.dataquest.com/dq/static/offer/programs/mobd-na.html.

To subscribe to Dataquest's Mobile Communications Terminal Devices North America program, please call 800-419-DATA or 408-468-8009. More information about Dataquest's programs, descriptions of recent research reports, and full text of press releases can be found on the Internet at http://www.dataquest.com.

GartnerGroup's 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.

As the world's leading authority on IT, GartnerGroup provides clients with a wide range of products and services in the areas of IT advisory services, measurement, research, decision support, analysis, and consulting. Founded in 1979, with headquarters in Stamford, Conn., GartnerGroup is at the center of a global community with more than 11,000 client organizations served by analysts in 80 locations worldwide. Additional information about the company is available on the Internet at http://www.gartner.com.