IDC reports the European Mobile Device Market Grew 25 percent in First...

IDC reports the European Mobile Device Market Grew 25 percent in First Quarter of 2004


The market for European mobile devices grew by 25.6% compared to the same period last year, driven by sustained smart phone volumes and continued growth for handheld device vendors. Standalone handheld device vendors recorded growth of 9%, as GPS bundles failed to record the same success in retail stores as in 4Q03 and lower margins forced at least one vendor to withdraw from the handheld market.

Converged device volumes continued to grow by around 35% during the quarter, although recorded growth was slower than expected. The business market displayed a greater desire for mobile solutions, reflected in the continued growth of vendors such as RIM with its integrated end-to-end email and personal information management solution. However, despite strong demand and healthy volumes, Nokia and Sony Ericsson failed to execute as efficiently as in previous quarters.

“Clearly, organizational restructuring and operational changes affected Nokia’s ability to execute as efficiently in the first quarter of the year,” said Andrew Brown, program manager for Mobile Devices at IDC. “Nevertheless, these changes will benefit Nokia in the longer term and allow a greater focus on the burgeoning market for business mobility.”

The market for standalone handheld devices was limited to single-digit growth as vendors focused on managing channel inventory, rather than selling-in higher volumes of devices. The entry-level handheld market continued to witness shrinking margins. Fewer promotional activities, particularly through the food retailer channel in Germany, also limited overall volumes, which had previously been driving volumes over the last few quarters.

“With retailers recognizing that PDAs are no longer the “in vogue” consumer electronic product, a growing number of handheld device models now vie for a dwindling amount of shelf space. Increased competition and pricing pressure will most affect those vendors that continue to deliver an uninspired product mix and may lead to greater consolidation and market withdrawals,” said Tim Mui, senior analyst for Mobile Devices at IDC.