Ericsson Aims To Outpace Growth Of Mobile Phones

Swedens giant Ericsson telecommunications group said on Monday it aimed to build its share of the worlds rapidly growing mobile telephones market.

Johan Siberg, the president of Ericsson Mobile Communications AB, said his company had just under 20 per cent in money-terms of the worlds mobile phone market roughly on a par with Finlands Nokia and Motorola of the United States.

The overall handset market has been growing about 50 per cent a year (in volume). Maybe it is dropping off a bit now. In absolute terms, it is still continuing very strong but in per centage terms maybe it is coming down to 40 per cent for next year, Siberg told Reuters in an interview.

 

We have been growing faster than the market in the past years and we have an ambition and a business goal to continue to grow overall faster than the market, he said.

Ericsson predicts that around 200 million mobile telephones will be in circulation worldwide by the end of this year.

The figure was 137 million at the end of 1996. We see half a billion subscribers worldwide in the year 2000, Siberg said.

The supply of new phones would increase rapidly, from around 100 million in 1997 to around 200 million in 2000.

Siberg said Ericssons market share in Asia was higher than 20 per cent but declined to give details. An Ericsson official said recently the company had around 30 per cent of the Asian market excluding Japan, where it still has no presence.

Sibergs division accounts for about a quarter of the Ericsson groups business.

In October, Ericsson reported sales in its mobile phones and terminals division of 29.39 billion Swedish crowns ($3.89 billion) for the first nine-months of 1997, compared to 14.39 billion crowns for the same period a year earlier.

Siberg said the company had seen a slowdown in mobile telephones sales growth in several Asian countries in the last few months but thought the problem would be short-lived.

We have seen orders dropping off in Thailand, in Indonesia, in the Philippines, in Malaysia too to some extent, he said.

The most recent (example) is I guess South Korea, which has been a pretty heavy steam engine in the growth of cellular.

I think it will be quite a short period, he said. We have also seen continued strong growth in China. We see positive development in Australia and in India, Hong Kong and Singapore.

He said the company expected Asia to become the worlds biggest market for mobile communications in the next few years.

We foresee that the handset phone market in Asia should continue quite strongly also next year, he said. We see Asia being the strongest growth region in this type of communications in the next three to four years.

He said around 40 per cent of the 200 million new mobile telephones expected to be shipped in the year 2000 would be to customers in Asia. Asia bought around 25 per cent of mobile telephones this year, he said.

He said mobile telephone prices would continue to fall over time by an average of 20 per cent a year, but said the company would cope with this by cutting costs and improving technology.

Prices are falling. We have seen a trend where the same level of phone has been dropping in price by some 20 per cent (a year), he said. I think that will continue.

($1 = 7.55 Swedish crowns)