Samsung grabs number 2 vendor spot

South Korean handset vendor Samsung edged Motorola out of the number two spot in the mobile handset market.

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By  Ronan Shields Published  July 16, 2007

South Korean handset vendor Samsung edged Motorola out of the number two spot in the mobile handset market.

The ranking by data monitoring company Ovum is measured by unit shipments during the second quarter of 2007.

Samsung enjoyed 49% year-on-year growth in terms of unit shipments during the period with the final number amounting to 37.4 million for the quarter. The vendor also increased its full-year handset shipment forecast from 133 million handsets to 150 million.

However Samsung's overall telecoms division suffered a 13% decline in operating profit to US$38.2 million during the quarter, with the average selling price of its handsets declining to US$148 from US$155 as compared to the same period a year earlier.

"The reduction in profit in the handset division is because of the change of mix, with a higher share of shipments at lower values into emerging markets," said Martin Garner, director of wireless intelligence at Ovum.

Garner also noted that Samsung's decrease in profit was partly attributable to the increase in its marketing costs, as the company aims to increase its traction in emerging markets, with an augmented pitch for the entry-level market segment.

With Motorola yet to confirm its second quarter 2007 results, the US vendor did say it expected handset shipments in the period to reach 36 million units.

The company also forecast overall second quarter sales to reach US$8.7 billion, down from US$9.4 billion in 1Q07.

Motorola also conceded that it no longer expected its mobile devices unit to turn a profit for full-year 2007, due to poor sales in the European and Asian markets.

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