Nokia storms ahead of the pack

Nokia is leaving its nearest rivals behind as figures reveal a surge in the company's share of the worldwide handset market. However, analysts are now warning of a tough ride for manufacturers due to drop in global demand for mobile phones.

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By  James Thornton Published  February 16, 2001

Nokia has extended its lead in global sales of mobile phones, while many of its competitors fell further behind, a survey has revealed.

The report by Gartner Dataquest shows that overall sales of mobile phones jumped by 45 percent to hit 412.7 million in 2000. Nokia phones accounted for 126.4 million of these, a market share of over 26 percent.

However, the figures are not so pleasing for some of the top handset makers. The market share for three of Nokia’s biggest rivals, Motorola, Ericsson and Panasonic all slumped, as analysts predict a rocky year for manufacturers in 2001. They are warning that the mobile phone market has now reached a level of saturation where demand will now start to plummet.

“The afterburners that propelled several years of consistently high growth rates now suddenly seem to have been switched off,” said Bryan Prohm, senior analyst, Gartner Dataquest.

“There is some significant stock carry-over to the beginning of 2001, meaning the total number of shipments in 2000 was about six million less than previous estimates.”

Some experts forecast a knock-on effect for next generation mobile production, warning that companies may be reluctant to plough money into 3G projects.

“The long-term prospects for the mobile sector look tough,” said Peter Richardson, principal analyst, Gartner Dataquest. “Few manufacturers are able to generate healthy profit margins, placing the necessary investments in next-generation handsets at risk.”

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