Nokia's mobile phone dominance falters

Mobile giant Nokia’s share of the handset market fell sharply this year as rival firms won over phone users, figures showed today.

Although the Finnish group was still the market leader, its share slumped to 28.9% in the first quarter of 2004 from 34.6% in the same period last year, according to market research group Gartner.

Nokia has seen its turnover weaken in recent months and has braced investors for a further slump.

Its dominant position has come under threat from rivals, while the strength of the euro above the dollar has added to the pressure.

Gartner analyst Ben Wood said Nokia had suffered because of decreased sales in Western Europe and North America.

“Nokia’s dramatic drop in market share resulted from a weak product portfolio and the decision by operators in Western Europe to source more phones from Nokia’s competitors,” he said.

Worldwide mobile phone sales rose 34% to 153 million units in the first quarter of 2004.

The second most popular handset maker after Nokia was Motorola, which increased its share to 16.4% from 14.7%.

Then followed Samsung, whose share rose to 12.5% from 10.8%; Siemens, up to 8% from 7.6%, and Sony Ericsson, up to 5.6% from 4.7%.

Mr Wood said Motorola now had to maintain its strong performance after regaining the trust of key operators.

“Given Nokia’s recent price cuts and more flexible approach to working with operators, Motorola can’t afford to be late with new products in the second half of 2004,” he added.

The study showed that Nokia sold nearly five million more handsets in the first quarter compared with last year. Despite this, an update from the company in April showed that actual turnover dropped 2% during the period.

Nokia also said at the time that turnover for the second quarter was expected to be “flat or slightly below” the €7bn posted last year.