on 25 April 2008, 10:17
by Cassimir Medford

Despite a looming recession in North America, financial crises in rich nations, and soaring food prices in poor countries, worldwide shipments of cell phones grew 14 percent year-over-year in Q1 2008, according to a report released on Friday.

The growth rate was higher than at any time in 2007 and was due in large part to surging demand in Asia, Africa and the rest of the emerging world, according to the report from Strategy Analytics. Roughly 282 million cell phones were shipped in the first quarter of 2008 compared to 247.2 million in the same quarter last year.The big winners were South Korean handset vendors LG and Samsung, which grew the most, while the big losers were Motorola, Apple, and Sony Ericsson. Market leader Nokia held its ground for the most part.“Volume-based handset vendors with broad geographical range prospered while the value players took a hit because their core markets are Western Europe, North American and Japan,” said Bonny Joy, an analyst with Strategy Analytics.Former number two handset maker Motorola, which has about 10 percent market share, is now in danger of losing its hold on the number three slot to LG, which now has 9 percent market share. Schaumburg, Illinois-based Motorola showed weakness on both the price-conscious “volume” side of the market and the high-end “value” side of the market.“The future is bleak for Motorola because they don’t have products to even maintain their 10 percent share,” Mr. Joy said. Apple, which operates exclusively on the value side, showed significant weakness. After three quarters of growth, the iPhone maker’s global market share fell for the first time ever from 0.7 percent in Q4 2007 to 0.6 percent in Q1 2008.The Cupertino, California-based company shipped 1.7 million iPhones worldwide in Q1 2008, down sharply from 2.3 million in Q4 2007. The 26 percent decline places it in a similar performance category to Sony Ericsson (28 percent), and Motorola (33 percent).“Apple’s numbers are not as bad as they seem because of seasonality and softness in its markets,” Mr. Joy said. “But the price of the iPhone is an issue in Europe, and I think U.S. consumers are waiting for the 3G iPhone.”London-based Sony Ericsson is also losing ground. Its shipment growth has nosedived from 64 percent to 2 percent due in large part to brand fatigue, according to the report.