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Western Europe Quarterly Handset Sales Fall 16.4%

Reuters
Wednesday, 28 May 2008 | 3:49 AM ET

Cellphone sales in Western Europe in January-March fell 16.4 percent from a year ago, the first decline since research firm Gartner started tracking the market in 2001, as the economic slowdown hurt demand.

AP

"Operators in this region have been driving sales of higher-end devices by offering higher subsidies but with longer contract periods, which is having a negative impact on replacement cycles," said Gartner analyst Carolina Milanesi.

"Sales of high-end devices were also adversely affected by the economic slowdown that many countries are experiencing."

Global cellphone industry volumes are set to grow 10-15 percent this year, helped by booming demand in emerging markets, she said.

Handset vendors sold 294.3 million mobile phones globally in the January-March quarter, with strong demand in emerging markets lifting sales 13.6 percent from a year earlier, Gartner said.

The main gainer from surging sales in emerging markets was the world's largest maker Nokia, whose market share rose to 39.1 percent in the first quarter from 35.5 percent in the same quarter the previous year, the research firm said.

The Finnish company has a strong lead in emerging markets.

South Korea's Samsung had 14.4 percent of the total market in the quarter, compared with 10.2 percent for struggling U.S. vendor Motorola .

Sony Ericsson's market share fell to 7.5 percent, dented by the fall in the western European market.

LG Electronics took the No. 4 spot from the Swedish-Japanese joint venture as its market share rose to 8 percent.

Nokia continued to benefit from demand for ultra-cheap phones in the quarter, but its profit margins were still superior to rivals.

Nokia's profit margin in cellphones unit rose to 20.3 percent in the quarter, while its best-performing rivals -- Samsung and LG Electronics' handset units -- were at 16 percent and 13.9 percent, respectively.

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