Fuelled by the growing popularity of mobile phones in regions such as China and India, there was a large surge in mobile phones sales in the 3rd quarter of 2006, with reported sales growing over 20% on a worldwide basis.  Total handset sales in the 3rd quarter alone were in the region of 250 million, with forecasters recently upgrading their total year sales estimates to just under 1 billion at 986 million units.

While the overall trend has shown a substantial increase, there are obviously wildly varying degrees of performance between the local markets of the world.  Not surprisingly the third quarter sales in the Asia / Pacific region were the most impressive, although the fall in Japanese sales was a little surprising as many observers still see further growth in this market (there are however worrying signs of a falling population figure in Japan which may effect forecasts over the next 20 years or so).

The story is slightly different in the more mature markets of Europe and the USA where first time subscriber figures are still under pressure, as are the handset replacement sales figures. However, some market observers are forecasting a reversal of this tend in the medium term as the introduction of new technologies such as mobile broadband and mobile television pick up momentum. 

On breaking down the sales figures between the handset manufacturers, Nokia, Motorola and Samsung account for a dominant 68% of total worldwide sales at present (with Nokia taking some 35% market share to retain number one spot).  While this dominance is expected to continue for some time, there are signs of pricing pressures in the market place with many networks keen to introduce new technologies into the market place, via heavily subsidised handsets.  This pricing pressure is forcing some of the major handset providers to seek both manufacturing and technological partnerships to reduce their expenditure, and reposition themselves further up the technology chain for the future.

The competitive nature of the industry was highlighted by the sudden downfall of BenQ, as financial difficulties hit the manufacturing arm.  As the company closed many of its overseas operations, there are concerns that the brand name will disappear altogether just 12 months after its formation.

As the industry becomes ever more cut throat, BenQ will not be the last of the smaller operators to encounter difficulties, with the post Christmas period magnifying company specific difficulties.  Its seems inevitable that the industry will yet again be dominated still further by the majors, with new brands finding it very difficult to break customer loyalty to the larger brands.