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A new report on the global wireless market says Samsung may beat out the new Sony Ericsson mobile giant to grab a coveted third place in the global rankings.
Strategy Analytics' "Global Handset Market: 2001 and 2002 Vendor Share Metrics" report predicts global mobile phone shipments will reach 454 million this year, with the clear leader Nokia boosting its share to nearly 38 percent.
But the report, released on Tuesday, points out that the newly combined Sony Ericsson Mobile Communications will struggle to maintain its third place market share ranking as it continues to re-group and focus its strategy on the higher end of the market. Sony Ericsson's biggest rival will be the Korean company Samsung, the report says, which should ship around 34 million handsets, strengthened by good sales in China, Western Europe and the Americas.
At the time of its union with Sony's mobile operations last year, Ericsson said it was confident Sony Ericsson would reach the number one spot in the mobile market, given the companies' combined expertise. The company said then that its plan was to focus on high-end and third-generation mobile items, but Strategy Analytics said that in practice the company does not seem to have nailed down that strategy.
Phil Kendall, director of global wireless practice at Strategy Analytics, explained that mobile companies need to pick a spot: either the high end of the market with lower volume sales or low value phones with high sales. He said Sony Ericsson seems at times to have ambitions on both directions.
"We do not feel that Sony Ericsson's strategy is that clear -- they do have ambitions to be a leading market share player," Kendall said. "If you are not Nokia, you can either play at the high end and try to generate high margin and low market share, or go for maximum market share at very low margins. Too many are trying to do both at the moment."
According to the researchers' predictions, Sony Ericsson will maintain a 7.9 percent market share and see fairly flat growth until the end of 2002, by which time Samsung will have gained enough momentum to gain a 7.5 percent market share.
Chris Ambrosio, senior analyst in the Strategy Analytics Global Wireless Practice, said Sony Ericsson's growth will be hampered in part by its struggles to redefine its product portfolio, as well as integrating the "dramatically different cultures" of the two merged entities.
The researchers also said that Nokia this year will drive product innovation with MMS (the next generation after text messaging), as well as imaging, Java, and colour displays. These factors will help encourage replacement sales as customers are inspired to upgrade their phones, the report said.
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