OXFORD, United Kingdom—With an estimated global market share of less than 2 percent, down from 6 percent last year, Philips’ cell-phone business looks set for termination. The company, which is also said to have low cell-phone brand awareness, recorded disappointing consumer handset satisfaction ratings in a recent study by Strategy Analytics.
According to Neil Mawston, an analyst with the market research firm, Philips, in its largest market of Western Europe, has a cell-phone market share of just 3 percent. “Of the major brands, Philips’ end users have the lowest levels of satisfaction, particularly with features such as handset size and display. Combine low brand awareness with a weak portfolio of feature-poor wireless devices in a maturing market and that’s a recipe for poor profitability and, ultimately, market exit,” concluded Mawston.
Strategy Analytics claimed that Nokia is still setting the pace for cell-phone development and ahead of Motorola in almost every feature category, the most notable deficits being in terms of size/weight and menu systems. However, Mawston warned Nokia that it will face strong competition in 2002 from the improving product portfolios of Sony Ericsson, Motorola, NEC, Siemens and Samsung.
