European mobile sales continue to decline

The latest Gartner report into the mobile phone industry has shown that sales are continuing to decline in Europe and growth is slowing in the US too.

Mobile companies are increasingly looking to develop the Far East and developing markets if growth rates are going to be maintained, say the analysts. Overall, the worldwide market is expected to grow at just over 10 per cent, they say.

"With a more mature market, mobile operators are seeing their service revenue come under pressure and, driven by lower flat-rate tariffs, demand for data services is starting to pick up, increasing demand for network investment," said Carolina Milanesi, research director for mobile devices at Gartner.

"Cost control and putting pressure on supplier pricing are the business norm of operators. Hence, mobile device vendors are experiencing increased pressure on device pricing."

Mobile phone sales in Western Europe are estimated to reach 188m units, a 1.5 per cent decline from last year, while sales in Japan should fall by 9.1 per cent and only increase in the US by 5.3 per cent.

The Asia/Pacific region is now the main growth area, with sales up 17.9 per cent.

"For the second half of the year, we expect sales in the third quarter to be more than the second quarter results, but only moderately as both Motorola and LG issued warnings for a sequential drop in sales, as well as an economic environment that remains challenging," said Milanesi.

"All the hopes for mobile phone manufacturers for the overall year-end growth results rest on the final quarter of the year when most new products will be introduced to the market and the normal seasonality will help boost sales."