Motorola, the top cell-phone provider in the United States, saw its market share increase in the second quarter, with growth nearly three times its larger rival, Nokia.
Semiconductor research firm iSupply released a report on Wednesday stating shipments of Motorola's cell-phones grew 12 percent from the first quarter at 52 million phones over the three month period.
Analysts attribute the growth to Motorola's appealing line up of products, including the RAZR, which sold over 5 million units in the first quarter, and the new KRZR phone driving sales for upcoming quarters.
Motorola is anticipating shipping at least two million KRZR handsets upon launch, which is significantly above the level of shipments they suggested when they first introduced the product, Citigroupâ€™s wireless analyst Daryl Armstrong said.
They upsized their orders after getting strong interest from the service providers, Armstrong said, saying he was initially skeptical of the number. However further research is increasing his conviction, saying confirming the number from multiple sources, and seeing Motorola placing orders to that level.
If we have a concern, he continues it is not relative to 2H volumes, but to early 2007 instead, seeing that no one has an informational edge on what the Christmas seasonal sell-through looks like.
Our only observation is that with the aggressive sell-in, the risk level of an inventory issue increases, Armstrong asserts. Vendors with the strongest product portfolios probably have less to worry about related to this issue.
Data released from Brighpoint, one of the world's largest distributors of mobile phones, also looks favorable for Motorola.
Brightpoint believes that both handset vendors could retain a ~33% share as it believes that â€œthe strong will get strongerâ€, in line with our view that vendor consolidation is likely to continue around the larger handset vendors, wrote UBS analyst Maynard Um.
The company believes Motorola can gain market share at ~200bps/qtr, ultimately reaching Nokia-type share in 2 years but not necessarily surpassing Nokia, he adds.
Um believes Motorola should continue to gain share driven from its strong, balanced product portfolio with current handsets such as the RAZR, Q, SLVR and upcoming handsets such as KRZR, W-Series, MOTOFONE and others.