Worldwide Mobile Phone Market Grows 14.3% Amid Economic Jitters, According to IDC

FRAMINGHAM, Mass.--(Business Wire)--
The worldwide mobile phone market experienced an expected
sequential downturn in shipments following a busy holiday quarter.
According to IDC's Worldwide Quarterly Mobile Phone Tracker, vendors
shipped a total of 291.6 million units during the first quarter of
2008 (1Q08), down 11.6% from the 330.8 million units shipped during
the previous quarter (4Q07) and up 14.3% from the 255.0 million units
shipped during 1Q07. While the first quarter results are in line with
IDC's 2008 forecast, concerns over the economy may negatively impact
handset purchases as the year progresses.

"The mobile phone market will be under increased pressure from a
number of factors that compete for users' attention and wallets," said
Ramon T. Llamas, senior research analyst with IDC's Mobile Device
Technology and Trends team. "Disposable income is being eroded by
rising food and fuel prices and worries about global financial markets
and slow economic growth are creating a cautious outlook for the
months ahead. Against this backdrop, many emerging markets continue to
offer tremendous growth potential and IDC expects highly competitive
pricing and innovative service plans will keep the overall market on
track for the year."

Demand for handsets in the low cost segment will remain present in
certain emerging markets throughout 2008, driving worldwide shipment
growth. In contrast, more mature regions are increasingly
characterized by highly competitive markets for replacement handsets
and somewhat slower shipment growth.

"As predicted, most mobile phone vendors experienced a lull in the
first quarter of 2008 with the exception of LG," said Ryan Reith,
senior research analyst for IDC's Worldwide Mobile Phone Tracker.
"Continued growth in the low cost segment will mean average selling
prices (ASPs) will be generally lower than in the past, but this will
be balanced somewhat by further expansion in the converged mobile
device or smartphone segment, especially in mature markets."

Top Five Vendors

Nokia once again outperformed its competitors, with total shipment
volumes greater than those of the next three vendors' combined.
Keeping volumes at a high level were its entry level devices going
into emerging markets, including its successful 1100 and 1200 series
devices, while more fully featured devices like its 5310, 5610, and
6500 series and Nseries devices generated the most revenue and profit
for Nokia. With a strong presence in emerging markets, Nokia is poised
to capitalize on replacement handset opportunities in these markets.

Samsung gained further clarity as the No. 2 vendor worldwide,
building its largest margin yet against Motorola. Although shipments
remained even from the holiday quarter, Samsung improved its presence
within key emerging markets, balancing out against soft demand in
Europe and North America. In the process its decreased marketing
expenses, allowing for double-digit profitability. Samsung remains
confident that it will reach its goal of 200 million units shipped
this year, and look to more full featured devices to be released in
the months to come.

Motorola had a disappointing quarter, falling further behind
Samsung and reaching shipment levels not seen since the second half of
2004. Gaps in its product portfolio left the company vulnerable,
especially in the areas of music, touch, and messaging where other
vendors have flourished with their own products. Further compounding
its problems was another quarter of operating loss and lower operating
margin. While the results speak to its ongoing difficulties, Motorola
has been building a framework to turn its fortunes around with plans
to separate the mobile devices business unit from the company and
streamline its silicon and software platforms to bring new devices to
the market later this year.

LG Electronics capitalized on Sony Ericsson's challenges to
re-take the No. 4 position for the first time since the beginning of
2006. Thanks to the continued demand of its flagship feature phones,
including the Viewty, Voyager, and Venus, LG bucked the trend of
seasonal decrease in shipments. In addition, LG returned to
double-digit profitability. Looking ahead, LG plans to grow its
presence within emerging markets and ship more high-end devices next
quarter.

Sony Ericsson started off the year citing several challenges
affecting its shipment volumes: diminished demand for its mid-range
and high-end devices, channel inventory buildup, component shortages,
and greater interest in low-price handsets in Asia/Pacific, an area
where the company has not had a strong presence. Despite this dour
news, the company hopes that its renewed focus on the North American
market with the W350, W760, Z555, and XPeria along with several
Cybershot, Walkman, and Web-ready devices around the globe will yield
positive results later in the year.

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Top Five Mobile Phone Vendors, Q1 2008 Results (Units in millions)
----------------------------------------------------------------------
Vendor 1Q08 1Q08 Market 1Q07 1Q07 Market 1Q08/1Q07
Shipments Share Shipments Share Growth
Nokia 115.5 39.6% 91.1 35.7% 26.8%
Samsung 46.3 15.9% 34.8 13.6% 33.0%
Motorola 27.4 9.4% 45.4 17.8% -39.7%
LG Electronics 24.4 8.4% 15.8 6.2% 54.4%
Sony Ericsson 22.3 7.6% 21.8 8.5% 2.3%
Others 55.7 19.1% 46.1 18.1% 20.8%
Total 291.6 100.0% 255.0 100.0% 14.3%
----------------------------------------------------------------------
*T

Source: IDC Worldwide Quarterly Mobile Phone Tracker, April 24,
2008

Note: Vendor shipments are branded shipments and exclude OEM sales
for all vendors.

Mobile Phones - These small, battery-powered, voice-centric
devices utilize operator-provided cellular/PCS air interfaces for
voice communication. They are designed primarily, in both form factor
and feature set, for a compelling mobile telephony experience, but may
also include text-messaging capability. Mobile phones may include a
headset jack for hands-free operation as well as a variety of
features, such as personal information management, multimedia, games,
or office applications. Mobile phones exist at all points along the
form factor, price point, and feature set continua. Mobile phones that
combine voice communications capabilities with pen or keypad handheld
data features are tracked within the Converged Devices category.

For more information about IDC's Worldwide Quarterly Mobile Phone
Tracker, please contact Kathy Nagamine at 650-350-6423 or
knagamine@idc.com.

About IDC

IDC is the premier global provider of market intelligence,
advisory services, and events for the information technology,
telecommunications, and consumer technology markets. IDC helps IT
professionals, business executives, and the investment community make
fact-based decisions on technology purchases and business strategy.
More than 900 IDC analysts provide global, regional, and local
expertise on technology and industry opportunities and trends in over
90 countries worldwide. For more than 43 years, IDC has provided
strategic insights to help our clients achieve their key business
objectives. IDC is a subsidiary of IDG, the world's leading technology
media, research, and events company. You can learn more about IDC by
visiting www.idc.com.

All product and company names may be trademarks or registered
trademarks of their respective holders.

For IDC
Ramon T. Llamas, 508-935-4736
rllamas@idc.com
or
Ryan Reith, 508-988-7902
rreith@idc.com

Copyright Business Wire 2008