Strategy Analytics: 2Q Handset Sales 297 Million, +15%; 3Q Seen 321 Million
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STOCKHOLM -(Dow Jones)- Worldwide mobile handset shipments rose 15% on year in the second quarter as growth in emerging markets remained robust despite the economic gloom, according to a report Thursday from research firm Strategy Analytics.

"High oil and food prices are, so far, having limited impact on worldwide handset volumes," said Strategy Analytics analyst Neil Mawston. "Growth for handset vendors is readily available, provided they have the right products at the right price."

Mawston also said he expects 321 million units to be sold in the third quarter on continued emerging market growth, though seasonal factors in Asia and sluggish demand in Western Europe and North America is expected to slow global growth rates overall.

Some 297 million mobile phones were shipped during the second quarter, when Nokia Corp. (NOK) the world's largest handset maker, had record global market share of 41%. Nokia sold 122 million phones in the period, thanks in large part to its dominance in emerging markets.

Still, with emerging markets making up the majority of growth and higher- margin smartphone sales slowing, the average selling price of handsets slipped in the quarter.

Samsung Electronics (005930.SE) sold 46 million handsets for a market share of 15%. Shipments grew 22% annually, which was the company's slowest growth in nearly two years, said the report. Mawston said the company's weakness remains the emerging markets, where it continues to miss out on the high-growth entry- level segment.

U.S.-based Motorola (MOT) beat expectations for the quarter and held off rival LG Electronics (066570.SE) to keep its third place ranking, with 28.1 million units, a 21% decline from last year. If Motorola cuts costs and refreshes its product line, Mawston said its handset business could return to profitability in 2009.

LG saw strong growth in the period, selling 28 million handsets. Competition is set to heat up, however, in the second half of the year, with other high-tier phones from competitors set to launch.

Sony Ericsson, the joint venture between Sweden's Telefon AB L.M. Ericsson ( ERIC) and Japan's Sony Corp. (SNE), had a difficult quarter. Shipments fell to 24.4 million units from 24.9 million a year earlier, as weakness in the company's Western European market and its small presence in emerging markets weighed on sales.

Below the top-five vendors, Apple shipped 700,000 units in the second quarter, down from 1.7 million in the first quarter. Still, the company's new 3G iPhone could provide a spike in third-quarter shipments, the report said.

  (Units In Millions)   2Q 08     2Q 07     1Q 08
  Nokia                 122       100.8     115.5
  Samsung               45.7      37.4      46.3
  Motorola              28.1      35.5      27.4
  LG                    27.7      19.1      24.4
  Sony Ericsson         24.4      24.9      22.3
  Others                48.7      41.3      46.5
  Total                 296.6     259       282.4

   All figures from Strategy Analytics.

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-By Adam Ewing, Dow Jones Newswires; +46 8 545 130 95;

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  07-31-08 1025ET
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