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2005 Wrap Up. 2006 Predictions.

29th December 2005

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The final part of our 2005 wrap up looks at the state of major mobile manufacturers and how they fared in 2005 - and what possibly lies ahead in 2006. As we said for last year's predictions, these can be inaccurate but a lot of fun!

 Nokia Nokia

2004 was a grim year for Nokia with a poor product range and declining market share, but in 2005 they turned everything around and came up with a range of innovative products that clawed back market share and re-established Nokia as the clear number one in the market.

In particular, the N-series (for example the N92) and E-series (such as the E61) range of phones show that Nokia is technical innovative. The L'Amour Series shows that Nokia have regained some marketing sense too. In fact, it's been hard to fault any of Nokia's releases during 2005 - they've produced a full range of handsets from budget phones to WiFi and 3G enabled smartphones. They've broken away from their "candy bar" only designs to incorporate several sliders, although clamshell phones are still rare in the Nokia line up. The Nokia 770 shows some clever thinking too.

Although Nokia brought out a lot of handsets that we didn't expect, frustratingly they didn't bring out devices that we were expecting - no 3G versions of the 9300, 9500 or 7710 for example. Also, the N-Gage series of handheld gaming units tanked during 2005 and the N-Gage QD has virtually vanished from the stores, with no developments in this area expected now until 2007.

The current strategy appears to be working well for Nokia, so we don't see a major change during 2006. Nokia's challenge though will be to get all the new products it announced for early 2006 to market in time. We predict that Nokia will cement its position as market leader during 2006.

 Motorola Motorola

Motorola's market share increased during 2005 and the RAZR has proved a huge hit. So, at first glance it appears that Motorola is doing well - however, we believe that the truth is something very different and that Motorola is in a deep crisis.

Apart from the RAZR, Motorola has very few truly successful phones. Many handsets were announced months ago and still have not made it to market (for example the Motorola E1120 announced in February 2005). The flagship MPx220 smartphone had a disastrous launch and eventually sank without trace. And worst of all, the long awaited ROKR music phone was a flop and was not well received by the press or the public.

It's not just handsets releases that Motorola are struggling with - they recently removed EDGE from many upcoming models because they couldn't make the technology work. There's a severe shortage of smartphones and 3G phones in Motorola's range too, showing that this is a company that it not even coming to grips with the underlying technologies.

Elsewhere, Nokia keep producing warmed over versions of the V500 to bulk out their product range, plus a variety of dirt cheap phones that presumably exist only to give Motorola some market share. Motorola have upgraded the RAZR line with the V3i to keep it going into 2006 which should at least mean that they'll remain dominant in the fashion phone market.

We said last year that we expected improvements with Motorola during 2005 because of management changes - but in fact things are getting worse. Handsets such as the sorely overdue E1120 are a huge embarrassment for the company, so Motorola's latest idea is to announce handsets immediately before they are announced, rather than a year ahead. This is really only papering over the cracks rather than addressing the issues.

We have no faith that Motorola will improve during 2006, and it will increasingly become dependent on a few popular phones combined with ultra-low-cost devices for the prepay market. We expect to see a significant downturn in market share during 2006. On the bright side, Motorola did acquire the remains of Sendo which might start to give it the "can do" attitude that it will need.

 Samsung Samsung

Samsung lost market share during 2005, despite having a wide range of interesting products pitched at the midrange market. Leading the pack are the competent D600, E720 and Z500 devices. As in 2004, Samsung still suffer from a confused portfolio of phones with similar specifications, combined with a naming convention that seems to defy logic.

The muddle is easy to demonstrate - the E720, E530, E730 and E620 are all basically the same device with slightly different specification levels. But that's only the start of it - a confusion of E-series, D-series and X-series handsets show a complex range that must surely reflect a lack of focus at Samsung.

To be fair, Samsung does seem to be getting its range together a little better. If.. and only if.. it continues to make improvements during 2006, then it should be able to take the number 2 slot from Motorola.

 Sony Ericsson Sony Ericsson

Sony Ericsson's W800i is our favourite device of 2005 as it's a good combination of style, technology and marketing, but it's probably the more "sober" variant - the K750i - which has had more of an impact on the marketplace.

Sony Ericsson have been fairly quiet during 2006 though - they've announced far fewer handsets than the competition, but by and large these have tended to be more sophisticated devices with a bigger profit margin than some rivals. The successful W800i has also spawned the W550, W600 and W900 Walkman phones too, plus the upcoming P990 smartphone.

However, Sony Ericsson need to work hard to keep the buzz going around its brand. For quite a large part of 2005, Sony Ericsson has been very quiet on the news front. Nonetheless, they have some cracking handsets coming to market which should at least ensure continued profitability, even if concentrating on higher end devices does sacrifice some market share.

 Benq Siemens Benq - Siemens

As expected, Siemens disposed of its mobile phone business in 2005, although this time last year most people were predicting a tie-up with the Chinese Ningbo Bird company rather that Benq. Although Benq still uses the Siemens name, it has indicated that it wants to move on fairly quickly to having all handsets branded "Benq" as soon as it can.

Presumably, the hope with the Benq-Siemens tie up was to emulate Sony Ericsson. However, the range offered by Benq under the Siemens brand during the later part of 2005 have been frankly awful with one or two exceptions. There are a wide variety of very cheap devices, with no smartphones at all and not much to show in the 3G area either.

Benq have acknowledged the shortcomings in their range though, and promise to have a significantly more diverse portfolio for 2006. It's still early days in the new organisation, and it's worth bearing in mind that Sony Ericsson struggled in its early days too.

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