Moto still holding second place in sales, Gartner reports

An aggressive pricing strategy to reduce inventory enabled Motorola Inc. to perform significantly better in global sales to end users in the second quarter than in the oft-cited, unit-shipment metric, according to data from Gartner.
The upshot: Motorola, based on sales to end users, remained the No. 2 vendor worldwide behind Nokia Corp. and slightly ahead of Samsung Electronics Co. Ltd. during the second quarter.
Most market analysis by leading firms, using unit shipments as a metric, had reflected after the second quarter ended June 30 that Samsung had succeeded in grabbing the No. 2 spot.
The positive news may provide only a slight psychological lift to the Schaumburg, Ill.-based handset vendor or to the legions of investors and industry observers astonished by the company’s precipitous slide. But any positive signs are surely welcomed by Motorola.
Still, the good news grew out of not-so-good news.
“Motorola suffered from weak demand on its rather dated portfolio,” said Carolina Milanesi, research director for Gartner’s mobile devices service. “And its attempts to reduce stock translated into poor sales into distribution channels. However, aggressive pricing allowed it to reduce inventory in key regions such as Western Europe.”
Gartner did not provide examples of specific handsets and prices to illustrate its findings, but significant sales of Motorola devices in Western Europe perhaps reflect that-at least at the right price-Motorola’s brand luster may not be as tarnished as its market share slide might otherwise suggest. But Gartner echoed the industry’s consensus on Motorola’s next move when it suggested that only “substantial changes” in the company’s portfolio would allow it to re-approach 20% market share.
Despite worldwide sales of 39.5 million units in the quarter, Motorola’s market share slipped to 14.6% from nearly 22%, while all four of its top-tier competitors posted share gains. Even the “other” category representing all other handset vendors slowed its shrinking share, declining to 19.3% from 20%, a reflection that relatively small but hungry companies stand ready to grab opportunity when a top-tier vendor stumbles.
Gartner’s new data on end-user sales, however, still reflect that Samsung has grown its share to establish the only real horse race in the top-tier vendor rankings. Samsung managed to achieve a 13.4% share based on sales, right behind Motorola’s 14.6% share. The gap between Sony Ericsson Mobile Communications (at 9% share) and LG Electronics Co. (at 6.8% ) is twice as large and SEMC’s momentum is greater. SEMC grew to its 9% share from 6.6% in the year-ago quarter, while LG gained only a half-percent share in the same period.
Gartner reported that global sales to end users in the quarter reached nearly 271 million units, a 17.4% increase from the year-ago quarter. North American end users purchased 41.4 million units, a 7% increase from the year-ago quarter. Sales in Western Europe reached 45.4 million units, an 11% annual jump. Sales in the Asia/Pacific region, in contrast, reached 95.4 million units, a nearly 41% jump from the year-ago quarter, which Gartner attributed to strong growth in China.