Nokia market share falls sharply

Nokia's share of the global cell phone market fell sharply in the first quarter of 2004, hurt by a lack of new models and a rocky relationship with mobile phone service providers, a survey found Tuesday.

Though the industry leader shipped more phones than in the first three months of 2003, its market share slid to 28.9 percent from 34.6 percent, market research group Gartner found, as Nokia lost ground to all of its top six rivals.

Gartner also noted that the overall handset market was growing strongly, with shipments rising 34 percent to 153 million units in the first quarter as consumers in emerging markets embraced mobile communications.

"The big story is in Western Europe, where Nokia has lost 10 percentage points of market share," said Gartner analyst Ben Wood.

"Nokia has two fundamental problems. One is its relationship with operators to provide them with personalized phones, and the other is a product portfolio that is not competitive with the models offered by its rivals," Wood said.

Nokia warned in April that it could not match the breakneck growth of the market due to a hole in the mid-range of its handset portfolio, and said it would sacrifice profitability in the short term until its line-up was more competitive.

Nokia admitted on Tuesday it had been wrong to put its own brandname before those of the operators.

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

"In the past, device makers made sure to differentiate their own products. It was a huge mistake to not help the operators to differentiate their products too," said Antti Vasara, vice president at Nokia Technology Platforms at the Mobile Handset Forum in Amsterdam.

Analysts remain worried Nokia's price cuts on some phones may not be enough to halt its market share slide, with some saying it may have to lower its current second-quarter guidance for flat to slightly lower group sales year on year.

The first-quarter market share decline marks a sharp deterioration from the 38-percent share that Nokia claimed for 2003, and is a far cry from its goal of 40 percent.

Nokia has said it lost ground in the first quarter, but estimated its market share only fell to 35 percent. Its handset unit sales actually increased in the period due to the robust market demand, but it could not grow as fast as its rivals.

For Subscribers

FOR SUBSCRIBERSCBP leaders cut out of Trump ad buy decision

FOR SUBSCRIBERSAmerican passenger drafted goodbye texts to her family as Flydubai plane plummeted

FOR SUBSCRIBERSCornell rape allegation pushes embattled New York prosecutor into national spotlight

FOR SUBSCRIBERSAbdul El-Sayed tries to woo MAHA voters as Democrats seek inroads with RFK’s supporters

FOR SUBSCRIBERSKratom-like substances are popping up in a typically benign supplement

FOR SUBSCRIBERSGOP super PAC increases its spending for Sen. Jon Husted in tough Ohio race

FOR SUBSCRIBERSRecords reveal tumultuous marriage between slain New York Times executive and wife

FOR SUBSCRIBERSFrom clean energy warrior to ‘wall of shame,’ James Talarico reverses on a fossil fuel money pledge

FOR SUBSCRIBERSCongressional staff planned official trip with luxury stops in Italy and France weeks before election

FOR SUBSCRIBERSA harrowing ordeal aboard an Israel-bound plane

FOR SUBSCRIBERSOpenAI CEO Sam Altman to skip congressional hearing on rogue AI agents

FOR SUBSCRIBERSKey DOJ lawyers departed Trump ‘grand conspiracy’ probe amid pressure to produce, source says

FOR SUBSCRIBERSTrump’s new AI chatbot often links to a site launched under Clinton 26 years ago

FOR SUBSCRIBERSAt MAHA summit, industry CEOs the movement once vilified take the stage

FOR SUBSCRIBERSThis Paralympian has two goals: Win medals and give away $500,000 to her teammates

The Finnish firm has lost about a third of its market value since it warned on April 6 that its market share was on the decline.

Nokia shares gyrated on Tuesday after the Gartner data's release, before settling down and rising 0.2 percent to 11.66 euros by 1550 GMT, underperforming the DJ Stoxx European technology index, which was up 0.5 percent.

Gartner measures sales to consumers -- instead of sales to retailers -- and is considered the industry's best indication for actual consumer demand. Its market share data chimes with figures released by research group Strategy Analytics in April.

Motorola, Samsung climb
Analysts said that, as the data were largely backward-looking, their value was limited, but expressed surprise at the differences between Nokia's and Gartner's estimates.

"Once again, people will question why there is such a big discrepancy between Nokia numbers and Gartner numbers, really between Nokia and all other figures," said Evli Bank analyst Karri Rinta, who rates Nokia shares "reduce".

Gartner said global number two Motorola boosted its market share to 16.4 percent from 14.7 percent, while that of South Korea's Samsung Electronics rose to 12.5 percent from 10.8 percent.

Rounding out the top five, Siemens's share rose to eight percent from 7.6 percent, and Sony Ericsson was at 5.6 percent versus 4.7 percent.

In mature markets, Gartner said older handsets were replaced with newer models featuring colour screens and cameras. "Russia was phenomenal in the first quarter. Brazil is just on fire and there's strong replacement in mature markets like Western Europe and North America," Wood said.

Gartner raised its forecast for total 2004 mobile phones shipments to 600 million from a March estimate of 580 million, the second upgrade this year. It started with a forecast of 560 million, up from 520 million sold in 2003.