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Mobile Device Vendors Gain from Upside

World stock markets have recently taken a beating and the U.S. domestic market is on the edge of recession but based on the latest mobile phone shipment figures from ABI Research, it seems no one bothered to tell the handset vendors.

"Many economic sectors are struggling and there are fears that the global market might mimic the downturn in the United States, but virtually all the mobile device vendors experienced very festive cheer in 4Q 2007," said ABI Research vice president Jake Saunders, after assessing latest vendor results. "It looks like the quarter will clock out at our forecast of 342 million devices, which takes the yearly tally to 1.15 billion -- a 15.8 percent increase on 2006."

"Taking into account the growing sense of global economic uncertainty, ABI Research has reduced its 2008 handset market growth forecast from 13.5 percent to 12 percent,” added research director Stuart Carlaw.

Motorola was the only vendor not to enjoy the fruits of 2007. By its own admission, Motorola's market share shrank 38 percent year-on-year from 23.3 percent to 12.4 percent. Nokia, Sony Ericsson, Samsung and mostly likely LG were net beneficiaries.

Motorola declares that its market share in 1Q 2008 looks set to decline further, but the company is fighting back. It has been beefing up its mobile device portfolio and some of its new handset models such as the ROKR E8 have received awards from key trade shows.

It should also be acknowledged that Motorola did reduce its presence in a number of emerging ultra-low cost handset markets, while Nokia, Samsung, LG, and Chinese vendors such as ZTE and Huawei are pulling out the stops to address them.

ABI Research says North America (and to a lesser extent South America) is the chink in Nokia's armor. Despite repeated declarations from senior management that Nokia will recover its position in the North American market, it has so far failed to do so.

North American carriers require more customization, exclusive sales periods, and personalization to appeal to their customers.

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