Despite an expected seasonal slowdown in the first quarter of this year, the world wide mobile phone still grew considerably. The same was true for the nascent market for converged mobile devices, or smartphones, which posted a decrease in the first quarter but still maintained impressive growth. Smartphones are mobile handsets that combine the functions of a personal digital assistant with CDMA or GSM wireless phone and data capabilities.

According to IDC, mobile phone shipments decreased sequentially by 5.9% during the first quarter and increased by 29.3% year-over-year to 152.7 million units, while the smartphone market posted a sequential decrease of 5.5% but a year-over-year increase of 85.8%.

Among the top vendors, Nokia experienced the sharpest sequential drop with a decrease of 19.2% resulting largely from a lack of mid-range handsets. As carriers looked for alternative sources to fill consumer demand, vendors such as Motorola and Samsung were able to gain significant market share at Nokia's expense. However, despite the loss in market share, IDC said Nokia remains firmly positioned as the market leader in both the mobile phone market and the converged mobile device market.

Top 5 Vendors Mobile Phone Vendors

    Vendor              1Q 2004 Market Share
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  1 Nokia                       29.3%
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  2 Motorola                    16.6%
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  3 Samsung                     13.1%
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  4 Siemens                      8.4%
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  5 Sony Ericsson                5.8%
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    Other                       26.9%
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"Despite the anticipated seasonal effects of the post-holiday first quarter, worldwide mobile phone manufacturers were able to produce significant year-on-year growth on the strength of mid-range handsets featuring color screens and cameras," said David Linsalata, analyst in IDC's Mobile Devices program. "Additionally, the market for converged mobile devices, or 'smartphones," demonstrated strong growth potential as both enterprises and consumers continue to show interest in improved devices combining data and telephony capabilities."