Cellphone shipments to break 1 billion barrier in 2006 - analysts

Chicago (IL) - Mobile phone manufacturers posted yet another impressive quarter with sales exceeding 225 million units, according to reports released today by two market research firms. Boston-based Strategy Analytics predicts that a total of 1 billion cellphones will be sold during this year.

Once again, the cellphone industry is outpacing the shipment predictions of market researchers. For several years, analysts typically have been cautious in their growth predictions, but it appears that manufacturers will be able to significantly outgrow most other major technology industries in 2006.

According to Strategy Analytics, global cellphone shipments jumped by 31% year over year, reaching a new record level of 229 million units. The number is about in line with the observations of IDC, which estimated sales at just under 227 million phones (+26% year over year). Both firms agreed that much of the growth is coming from emerging and developing markets, while replacement sales in mature markets moving along in a solid pace as well.

"The year-over-year increase indicates that consumer demand in mature markets is still high enough to drive replacement handset purchases. At the same time, continued growth in developing markets around the world is being fueled by both new subscriptions and replacement purchases," said Ramon Llamas, research analyst for IDC’s mobile markets group. "The fact that the market is starting the year above the two hundred million unit mark in the historically slower first quarter is a good indicator of where the market may be by the end of the year."

Llamas stopped short of saying how many phone may be actually sold this year. Strategy Analytics was brave enough to predict that the industry will be hitting one million units this year - for the first ever and just about three years after some analysts had forecasted that cellphone manufacturers may be hitting a roadblock at the 500-million-mark. "We expect strong demand to continue throughout the coming months and we forecast that full-year sales will reach a record 1.0 billion units worldwide by the end of 2006 - this represents 22% growth from 817 million in 2005," said Chris Ambrosio, an analyst with Strategy Analytics.

In terms of market shares, Nokia continued to dominate the market with year-over-year-growth of 39.6% and 75.1 million phones shipped during Q1. Motorola posted another strong quarter with growth of 60.6% and 46.1 million phones. Samsung arrived as solid third with 18.4% growth and 29.0 million unit shipments. LG and Sony jumped by 40.5 and 41.5% to shipments of 15.6 and 13.3 million, respectively.