10Meters News Report

March 20, 2001 – Mobile phone suppliers looking to succeed in today's fiercely competitive market should be prepared to offer "strongly differentiated offerings," according to research firm Gartner Dataquest.

"The rapid annual growth rates of the past several years concealed numerous operational and strategic weaknesses among global handset manufacturers," said Bryan Prohm, senior analyst for Gartner Dataquest's telecommunications group. "However, these deficiencies are now being fully exposed thanks to a more challenging business environment...and although sales growth will continue, only those manufacturers with a strongly differentiated offering will continue to thrive."

Despite slower growth, Gartner projects that sales this year will exceed 506.5 million units, a 23 percent increase over last year's sales. Last year, worldwide mobile phone sales were up 38 percent over 1999 sales.

Gartner's forecast comes on the heels of reduced earnings warnings from cell phone makers Nokia and Motorola.

Among Gartner forecasts, based on sales to end-users:

• While Western Europe was the leading region last year with 140.5 shipments, Asia/Pacific and Japan will be the leading area in 2001, with sales expected to hit 169.6 million units – a 31 percent increase over 2000.

• Western Europe sales are projected to reach 166.6 million units, a 19 percent increase over 2000.

• North America will be the third-ranking region for mobile phone sales in 2001, with shipments expected to reach 90.1 million units, an 18 percent increase over 2000

• Latin America will grow 17 percent, with sales expected to top 42 million units.

• The rest of Europe, Middle East and Africa is on pace to hit sales of 38.2 million units, up 23 percent from 2000.