Mobile phone shipments increasingly move from being new handsets for first-time users to replacement handsets for seasoned users, and overall growth will continue, but at a slower rate.

Mobile phone vendors shipped 256.4 million units worldwide in the first quarter of 2007, a year-on-year increase of 10.0% but 13.8% lower than the record shipments in the previous quarter.

The first quarter of 2007 marks the first quarter of slower growth in the mobile phone market, a significant change from the growth exhibited each quarter during all of 2006. Year-on-year growth during each of those quarters topped 20%, significantly higher than the 10.0% growth posted at the start of 2007. Mobile phone shipment tracking service IDC says that, as more subscribers are added to the network, fewer new subscribers are left to be added. Consequently, mobile phone shipments increasingly move from being new handsets for first-time users to replacement handsets for seasoned users, and overall growth will continue, but at a slower rate.

"The increase in worldwide phone shipments was driven, in part, by new subscribers in emerging markets and, in part, by replacement sales in mature markets," notes Ramon Llamas, research analyst with IDC's Mobile Devices Technology and Trends group.

“While rankings did not change among the top five vendors, some interesting trends have begun to unfold,” says Ryan Reith, research analyst for IDC’s Worldwide Mobile Phone Tracker. “Samsung was able to benefit from Motorola’s misfortunes by recording a positive sequential growth in the first quarter, which is uncommon given the effects of seasonality on this industry. While Motorola announced plans to revamp growth, the sudden shift in momentum demonstrates how competitive this industry is and how innovation on product development is essential."

Top Five Mobile Phone Vendors
Nokia shipped 91.1 million units in 1Q07, citing continued success in key regions.

Motorola shifted its focus towards recovery after shipping 45.4 million units and experiencing operating losses for the quarter.

Samsung bucked the trend of other leading vendors by posting both a sequential and year-over-year increase in shipments, and reached a new record level of shipments at 34.8 million units. Fueling the company's success was strong sales of its "Ultra Edition" handsets, particularly its D900 model, as well as its E250 handset.

Sony Ericsson registered the largest year-on-year growth among the leading vendors during the quarter, citing improvement in Europe, Asia/Pacific, and Latin America with its low- and mid-tier product portfolio.

LG Electronics posted an expected seasonal sequential decrease in shipments as well as flat growth from the same quarter a year ago with a total of 15.8 million units shipped.