Western Europe's mobile phone market maintained double-digit growth in the opening quarter of 2006 as shipments increased by 11% year on year to reach 40.7 million units, compared to 36.8 million in the corresponding quarter of 2005, an IDC report said.
"Although mounting saturation in subscriber growth across Europe is increasingly inhibiting handset shipment growth, the market in 1Q06 matched the growth rate exhibited in the opening quarter of 2005 despite a lack of impetus commonly provided by new handset launches," said Geoff Blaber, senior research analyst, European Mobile Devices at IDC.
IDC said mounting consumer migration towards W-CDMA devices, driven by competitive service pricing and combined with highly aggressive handset subsidies across operator portfolios, was a key market performance driver in the first quarter.
IDC said, however, that despite relatively healthy unit volumes, intense vendor competition and sustained scrutiny of handset portfolios and costs by mobile operators continued to have a negative impact on vendor profit margins.
Furthermore, downsizing of portfolios meant the top 3 vendors accounted for almost 70% of all traditional mobile phones shipped, compared to 62% in 2005, IDC said.