European Mobile Market Shrinks

September 29, 2009 Updated: October 1, 2015
A visitor stops at a poster for Samsung's new Jet smartphone at the Samsung stand on opening day at the IFA technology trade fair on September 4, 2009 in Berlin, Germany. (Sean Gallup/Getty Images)
A visitor stops at a poster for Samsung's new Jet smartphone at the Samsung stand on opening day at the IFA technology trade fair on September 4, 2009 in Berlin, Germany. (Sean Gallup/Getty Images)

In Europe, where most businesses and consumers are still reeling from the global recession, mobile phone makers are feeling the pinch.

The latest data from market research firm IDC found that second-quarter mobile phone shipments in Western Europe were down 6 percent from the same quarter in 2008. While the sales are a 14 percent improvement over the first quarter, full year results are expected to come in below expectations.

"The first six months of the year were very challenging to both vendors and operators in Western Europe. The market was hit hard by the financial crisis, and demand mobile for phones slumped as never experienced before," said Francisco Jeronimo, IDC’s European mobile devices research manager, in a statement.

The silver lining for mobile phone manufacturers is that higher-margin smartphone sales are up 25 percent for the quarter, while traditional handset sales declined 12 percent. Both manufacturers and mobile carriers prefer to sell smartphones as they can tack on extra services such as messaging, e-mail, and Web surfing.

IDC found that Asian handset makers are making huge inroads in a European market traditionally dominated by Scandinavian giants Nokia Corp.. and Sony-Ericsson.

“For the first time, Samsung and LG together shipped more devices to Western Europe than Nokia,” according to IDC. “Nokia continues to be the market leader, with 36.3 percent market share, but the gap to Samsung, the second biggest vendor with 28.9 percent market share, continues to diminish.”

North American smartphone makers Apple Inc. and Research In Motion Ltd. together only accounted for 6 percent of the Western European market as of the second quarter.

Vodafone Introduces Web Suite

Mobile carriers have largely stood on the sidelines as popular mobile applications continue to increase in popularity. Apple Inc.’s iPhone pioneered the concept, working with third-party developers to introduce a slew of programs that use technologies and services such as GPS, 3G networks, social networking, and remote storage.

Last week, British mobile carrier Vodafone introduced an ambitious new Web service called Vodafone 360 that includes a “cloud”-based depository of a mobile user’s address book, music downloads, applications, as well as social networking contacts on Facebook and Twitter.

The service, unlike phone-specific applications from Apple, BlackBerry, and Android, will be accessible from multiple handsets, PCs, and Macs.

Vodafone launched the service to coincide with its new marketing tagline “Power to You,” and it is the first carrier to offer file/application/preferences synchronization across mobile phones and computers.

Portugal Telecom SGPS SA also introduced a similar Web-based service called “Pond.”