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Nearly 1 Billion Mobile Devices Shipped in 2006, But Handsets Fail to Wow End-users

“Reviewing handset shipments for 2006, you would have to give a B+ for Effort but only C+ for Results,” says Jake Saunders, Asia-Pacific research director for ABI Research. “Almost 294 million handsets were shipped in the fourth quarter, bringing the annual total just short of a billion handsets (990m).”

The industry got off to a very strong first quarter. 2Q met expectations but 3Q proved quite soft for the handset market as a whole, and 3G phones in particular. End-users chased phones with fashion and multimedia features rather than 3G capabilities. 4Q’s numbers were respectable but the handsets lined up in end-of-year festive promotions proved rather underwhelming.

“End-users proved fickle for a number of wireless handset manufacturers,” says wireless research director Stuart Carlaw. “Motorola’s RAZR is no longer the darling of the marketplace and Nokia’s E61 and E62 were unable to deliver knockout blows to RIM’s BlackBerry devices. Furthermore a number of manufacturers responded to market conditions by cutting handset prices, which pulled down ASPs.”

It is clear that a number of trends are shaping the landscape:

  • Emerging markets are starting to make a real impression on handset vendor shipment numbers. Expect handset manufacturers to pay more attention to their needs.
  • Manufacturers with a respectable ultra-low-cost handset portfolio will retain their market share while others will see theirs diminish. They will have to decide to specialise, merge, or pull the plug.
  • While Nokia’s position may seem unassailable, there is hope for other vendors. In the US, Nokia’s market share considerably underperforms its global average. Clearly handset vendors can appeal to localized market needs to chip away at Nokia’s global dominance.
  • Many end-users are getting bored with the same old lineup of handsets, so expect to see more fanfare over handsets that break the mould (e.g. the iPhone).
  • Handset manufacturers will continue to bemoan declining ASPs, but declining ASPs have become universal.
  • 3G devices shipment numbers will not “wow” anyone in 2007, but they will continue to build momentum.

Given the 4Q-2006 results, expectations for 2007 must be cautious. Growth is likely to be in the 10% to 12% range.

These latest shipment figures are reported in the new quarterly update to ABI Research’s “Mobile Device Forecasts”, which provides critical data on vendor market share, vendor ASPs and handset shipments (broken down by region, technology, operating system and type). It forms part of the firm’s “Mobile Devices Research Service (

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services, and market reports in broadband and multimedia, RFID and M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information, visit, or call +1.516.624.2500.

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