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European Converged Mobile Device Market

According to the latest market data from IDC, the Western European mobile device market (including standalone handhelds and converged devices) grew by 25 percent year on year in the opening quarter of 2006, as total shipments reached 3.2 million units.

Significantly, the handheld market failed to recover from the dramatic decline in 4Q05, as shipments of just 549,000 units represented further negative growth of -21 percent year on year, with only Fujitsu Siemens registering positive growth. Additionally, disappointing growth of 43 percent and shipments of 2.67 million units for converged devices meant market performance fell below expectations.

"As anticipated, continued migration towards converged devices combined with a decline in dedicated GPS unit ASPs caused a second consecutive quarter of negative growth for handhelds," said Geoff Blaber, senior research analyst, European Mobile Devices. "Given the dramatic ASP declines in 2005, shrinking margins mean few vendors can resort to further price cuts as a mechanism to invigorate growth, leading IDC to believe that vendor market withdrawals are likely in 2006."

With the converged device market continuing to rely largely on S60 shipments in consumer segments to drive growth (Symbian OS accounting for 72 percent of shipments) in 1Q06, growth was disappointing at 43 percent year on year as portfolio transitions for vendors such as Sony Ericsson and Motorola, combined with a lack of new product introductions, curbed first quarter growth. Furthermore, while Windows Mobile enjoyed market growth of 77 percent, growth remains inhibited by a lack of support from OEMs with the capability to complement the volumes supplied by Taiwanese vendor HTC.

"Despite a disappointing opening quarter for the converged device market in 2006, IDC predicts strong growth in subsequent quarters as the consumer market responds to the introduction of compelling solutions running Symbian OS, including multiple Nokia N range offerings and the Sony Ericsson W950. With a dramatic expansion of enterprise-class devices from Nokia, Sony Ericsson, RIM, and Windows Mobile vendors in 2Q and 3Q and the abundance of highly segmented mobile email solutions, IDC believes the Western European converged device market can still exceed 20 million units in 2006," said Jean-Philippe Bouchard, senior research analyst, European Mobile Devices.

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