Motorola slides to third in mobile phones, study says

A weak mobile phones and inventory problems have resulted in Nokia slipping to third place in third-quarter handset shipments, according to Gartner.

Motorola has dropped to third place behind Samsung in the worldwide mobile phone market because of inventory issues and an unremarkable product lineup, Gartner said on Tuesday.

Motorola accounted for 13 percent of the phones sold to end users in the third quarter, down from 21 percent in the same quarter last year, Gartner said. At the same time, Samsung increased its share to 15 percent, while Nokia extended its lead at the top of the pack, accounting for 38 percent of the market, or more than one in every three mobile phones sold.

The figures will be a blow to Motorola, which lost share amid a strengthening market overall. Total sales to end users last quarter reached 289 million phones, up 15 percent from a year earlier. But Motorola had performed poorly all year, so the results were no great surprise, according to Carolina Milanesi, Gartner's research director for mobile devices.

"Motorola's been struggling since the end of 2006, so it's not just this quarter," she said.

Its problems have been two-fold, according to Milanesi. Motorola hasn't developed a phone to ignite the imagination in the way its popular Razr did a few years ago, she said, leaving it with a weak line-up. "The Razr2 has done okay, but it's not had the same impact that the first Razr did," she said.

In addition, Motorola's sales into the channel -- or the phones it ships to retailers -- have been weak, she said. This was offset in the first half of the year because retailers had a buildup of Motorola stock, which they could sell at low prices to boost shipments, she said. "This quarter the sales into the channel are still weak, but they don't have much inventory to do fire sales like they could in Q1 and Q2."

Motorola is unlikely to reverse the decline before it releases new models in the second half of 2008, Milanesi said. The company has slipped to third position before, but for most of the past few years it has been number two. Motorola officials did not immediately comment on the report.

Samsung was happy to exploit the U.S. company's weakness. It sold 42 million phones in the quarter, managed its inventory well and milked the popularity of its Ultra Edition II phones, Gartner said. Samsung did especially well in Western Europe, where it accounted for about one in every five phones sold.

But it is Nokia, which three years ago was struggling, that is starting to look unassailable. The company sold 110 million phones in the last quarter, according to Gartner, more than twice as many as Samsung and nearly three times as many as Motorola.

"They seem to be doing everything right," Milanesi said. Nokia is wrestling with lower average prices, because it's selling more low-end phones in China and India, but its cost management and distribution strategy mean it is not suffering financially, Gartner said.

The fourth and fifth placed phone makers were Sony Ericsson and LG Electronics, with 9 percent and 7 percent of the market, respectively.

India saw the fastest growth by region, with sales climbing to 24.5 million phones. The Asia-Pacific region grew 26 percent overall, Western Europe 15 percent and North America 10 percent.

In Western Europe, mobile phone penetration is above 100 percent in every country except France, Gartner said, meaning there are more phones than people.

The company predicts continued worldwide growth in the fourth quarter, of between 10 percent and 15 percent.

Join the newsletter!

Or
Error: Please check your email address.
Rocket to Success - Your 10 Tips for Smarter ERP System Selection
Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

James Niccolai

IDG News Service
Show Comments

Essentials

Mobile

Victorinox Werks Professional Executive 17 Laptop Case

Learn more >

Exec

Budget

Back To Business Guide

Click for more ›

Brand Post

Most Popular Reviews

Latest Articles

Resources

PCW Evaluation Team

Andrew Teoh

Brother MFC-L9570CDW Multifunction Printer

Touch screen visibility and operation was great and easy to navigate. Each menu and sub-menu was in an understandable order and category

Louise Coady

Brother MFC-L9570CDW Multifunction Printer

The printer was convenient, produced clear and vibrant images and was very easy to use

Edwina Hargreaves

WD My Cloud Home

I would recommend this device for families and small businesses who want one safe place to store all their important digital content and a way to easily share it with friends, family, business partners, or customers.

Walid Mikhael

Brother QL-820NWB Professional Label Printer

It’s easy to set up, it’s compact and quiet when printing and to top if off, the print quality is excellent. This is hands down the best printer I’ve used for printing labels.

Ben Ramsden

Sharp PN-40TC1 Huddle Board

Brainstorming, innovation, problem solving, and negotiation have all become much more productive and valuable if people can easily collaborate in real time with minimal friction.

Sarah Ieroianni

Brother QL-820NWB Professional Label Printer

The print quality also does not disappoint, it’s clear, bold, doesn’t smudge and the text is perfectly sized.

Featured Content

Product Launch Showcase

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?