Regional Analysis
The Asia/Pacific market registered mixed fortunes in 3Q08. Although there were signs of growth in emerging markets like China and Indonesia, other developed markets suffered during the quarter. In particular, the Australia market slumped due to a combination of third-quarter seasonality and weak economic sentiment, while the high-end Korea market experienced a double-digit decrease as dueling operators eased away from an expensive subsidy war.
In North America, new releases from Apple, Palm, and Research In Motion, along with the highly anticipated release of the HTC G1, pushed the converged mobile device further into the public eye and into users' hands. Conversely, traditional mobile phones were not able to keep up the pace and showed a slight decline from a year ago. Even so, overall growth in the region remained sound heading into 4Q08.
In Latin America, the mobile phone market posted slower growth than expected, but the converged mobile device market made terrific strides, especially with the official release of the Apple iPhone in key countries. Although the region is widely known as a key emerging market, that has not stopped carriers and vendors from trying to migrate users to higher-end devices and services.
The EMEA market posted mixed results, with continued downturn in Western Europe due to economic challenges but still strong growth from the converged mobile device market. In neighbouring CEMA, vendors showed no sign yet of a significant slowdown. While the financial crisis had an impact on sales in Russia and Eastern Europe, emerging markets in general have so far proved resilient to a slowdown in the mobile arena, and this is particularly true of Africa, which is benefiting from lower oil and food prices.
Top Five Mobile Phone Vendors
Nokia remained solidly in the market leadership position, with shipments greater than the next three vendors' total volumes combined, but not even it was immune from challenging market conditions. Citing a key decision not to compete against aggressive pricing strategies of other handset vendors, increased competition around the globe, and a slower ramp up of key devices during the quarter, Nokia posted a drop in overall revenue, profit, and market share.
Even so, the company remains in strong position with its brand, cost structure, and operations to assure continued success. As for devices, Nokia is looking to its E71, N95, and its recently announced 5800 XpressMusic to gain attention during the holiday quarter.
Samsung reached a new milestone during the quarter, shipping over fifty million units for the first time in its history. The company saw success across its product portfolio, receiving a warm reception for its feature phones like its popular touchscreen-capable Instinct and entry-level devices like its C260 and B130. In the process, the company posted more than twice the growth of the overall market and realized almost 11 percent operating margin.
Key to its success was an aggressive pricing strategy, increased attention within emerging markets, and massive marketing campaigns.
Sony Ericsson took third place worldwide for the first time in its history, despite ongoing restructuring across the company and a net loss for the quarter. At the same time, Sony Ericsson's ASP's continued to sink, reaching 109 Euros for the quarter. But the quarter was not without its highlights, as the company officially launched its much anticipated XPeria X1 as well as its first 3G phone in North America with the TM506.
