Cell phone sales decline

OXFORD, United Kingdom—For the first time in recent memory, the worldwide sales of cell phones dropped as operators cut subsidies and consumers stopped purchasing.
Gartner Dataquest said that worldwide shipments of cell phones to end users fell 8.4 percent to just under 90 million units in the second quarter of 2001, compared with 97.8 million units in the same period last year. Sales in first quarter this year were reported as being 96.6 million.
This downturn is expected to see Nokia come under increasing pressure in the third quarter this year—some analysts are even talking of the company issuing a profit warning—as Nokia’s market share slipped by 0.5 percent in the second quarter. Meanwhile, Motorola increased its share from 13.2 percent in the first quarter this year to 14.8 percent in the second quarter, and even beleaguered Ericsson moved from 6.8 percent to an 8.3 percent share.
Nokia’s fall from grace, is being blamed on its failure to provide General Packet Radio Service (GPRS) cell phones at a time when other manufacturers were establishing themselves in the segment. However, some analysts are claiming that markets in Western Europe have reached near saturation point—as is perhaps illustrated by Austria reporting almost 80-percent penetration.