Nokia Eats Moto Market Share

Nokia Corp. (NYSE: NOK)'s latest earning report, released today, threw more light on its strength in the cellphone market and shows how the Finnish giant -- and others -- are eroding Motorola Inc. (NYSE: MOT)'s market share.

Nokia estimates that during the second quarter of 2007, the total mobile devices shipped by its mobile phone, multimedia, and enterprise groups hit 100.8 million units, representing 29 percent year-over-year growth and an 11 percent increase from the previous quarter. This gives Nokia an industry-leading market share of around 38 percent for the quarter.

Compare this with Motorola, which said it shipped 35.5 million phones in the second quarter, giving it around 13.5 percent of the worldwide market. (See Moto: Hello Zero.)

Analysts say that Nokia and others are eating away at Motorola's fragile market share.

"With some simple forecasting on their numbers, we were expecting the normal market growth and trend of Nokia within that to give them 96 to 97 million devices this quarter," says Martin Garner, director of wireless at Ovum Ltd. "They came in close to 101 million, so they got something like a 4 to 5 percent lift from Moto."

Nokia isn't the only vendor taking up Motorola's slack either. Strategy Analytics Inc. says that Samsung Electronics Co. Ltd. (Korea: SEC) has now surpassed Motorola to be come the No. 2 handset vendor. (See Research: Samsung Becomes No. 2.)

Nonetheless, the handset picture isn't entirely rosy even for Nokia. As analyst Richard Windsor notes, the company may be growing share "bit by bit" but it is also seeing the average selling prices of its phones fall, thanks to tough competition.

The U.S. also remains a sore spot for Nokia, where it posted a 21 percent decline in phone shipments.

— Dan Jones, Site Editor, Unstrung

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