Worldwide Mobile Phone Market Grows 14.3% Amid Economic Jitters, According to IDC

The worldwide
mobile phone market experienced an expected sequential downturn in shipments
following a busy holiday quarter. According to IDC's Worldwide Quarterly Mobile
Phone Tracker, vendors shipped a total of 291.6 million units during the first
quarter of 2008 (1Q08), down 11.6% from the 330.8 million units shipped during
the previous quarter (4Q07) and up 14.3% from the 255.0 million units shipped
during 1Q07. While the first quarter results are in line with IDC's 2008
forecast, concerns over the economy may negatively impact handset purchases as
the year progresses.

"The
mobile phone market will be under increased pressure from a number of
factors
that compete for users' attention and wallets," said Ramon T. Llamas,
senior
research analyst with IDC's Mobile Device Technology and Trends team.
"Disposable income is being eroded by rising food and fuel prices and
worries
about global financial markets and slow economic growth are creating a
cautious
outlook for the months ahead. Against this backdrop, many emerging
markets
continue to offer tremendous growth potential and IDC expects highly
competitive pricing and innovative service plans will keep the overall
market
on track for the year."

Demand
for handsets in the low cost segment will remain present in certain emerging
markets throughout 2008, driving worldwide shipment growth. In contrast, more
mature regions are increasingly characterized by highly competitive markets for
replacement handsets and somewhat slower shipment growth.

"As
predicted, most mobile phone vendors experienced a lull in the first quarter of
2008 with the exception of LG," said Ryan Reith, senior research analyst for
IDC's Worldwide Mobile Phone Tracker. "Continued growth in the low cost segment
will mean average selling prices (ASPs) will be generally lower than in the
past, but this will be balanced somewhat by further expansion in the converged
mobile device or smartphone segment, especially in mature markets."

Vendor Highlights

Nokia once again outperformed its competitors, with total
shipment volumes greater than those of the next three vendors' combined.
Keeping volumes at a high level were its entry level devices going into
emerging markets, including its successful 1100 and 1200 series devices, while
more fully featured devices like its 5310, 5610, and 6500 series and Nseries
devices generated the most revenue and profit for Nokia. With a strong presence
in emerging markets, Nokia is poised to capitalize on replacement handset
opportunities in these markets.

Samsung gained further clarity as the No. 2 vendor
worldwide, building its largest margin yet against Motorola. Although shipments
remained even from the holiday quarter, Samsung improved its presence within
key emerging markets, balancing out against soft demand in Europe and North
America. In the process its decreased marketing expenses, allowing for
double-digit profitability. Samsung remains confident that it will reach its
goal of 200 million units shipped this year, and look to more full featured
devices to be released in the months to come.

Motorola had a disappointing quarter, falling
further behind Samsung and reaching shipment levels not seen since the second
half of 2004. Gaps in its product portfolio left the company vulnerable,
especially in the areas of music, touch, and messaging where other vendors have
flourished with their own products. Further compounding its problems was
another quarter of operating loss and lower operating margin. While the results
speak to its ongoing difficulties, Motorola has been building a framework to
turn its fortunes around with plans to separate the mobile devices business
unit from the company and streamline its silicon and software platforms to
bring new devices to the market later this year.

LG Electronics capitalized on Sony
Ericsson's challenges to re-take the No. 4 position for the first time since
the beginning of 2006. Thanks to the continued demand of its flagship feature
phones, including the Viewty, Voyager, and Venus, LG bucked the trend of
seasonal decrease in shipments. In addition, LG returned to double-digit
profitability. Looking ahead, LG plans to grow its presence within emerging
markets and ship more high-end devices next quarter.

Sony Ericsson started off the year citing
several challenges affecting its shipment volumes: diminished demand for its
mid-range and high-end devices, channel inventory buildup, component shortages,
and greater interest in low-price handsets in Asia/Pacific, an area where the
company has not had a strong presence. Despite this dour news, the company
hopes that its renewed focus on the North American market with the W350, W760,
Z555, and XPeria along with several Cybershot, Walkman, and Web-ready devices
around the globe will yield positive results later in the year.