Economic Crisis To Squeeze Mobile Phone Market In 2009

Saturday, December 27, 2008: The impact of the global economic crisis will spread to the mobile phone market resulting in a downturn in shipments in 2009, reported IDC. The total mobile phone volumes will be 1.9 per cent lower in 2009 than 2008 levels, the first downturn in annual shipment volumes since 2001, when shipments declined 2.3 per cent.
According to the report, the mobile phone market has enjoyed double-digit annual growth due to an increased emphasis on emerging markets. However, emerging market growth has been steadily slowing as these markets mature. IDC now expects worldwide growth to be just 7.1 per cent in 2008 before slipping into negative growth in 2009.

In recent months, a number of major industry players – including component suppliers, handset makers, and operators – have announced their concerns about handset volumes in 2009.

"Nokia's announcement was the first sign of troubles to come," said Ryan Reith, senior analyst, mobile phone tracker, IDC. "However, the real concerns set in with announcements from the chipset vendors who supply the industry. Qualcomm, Texas Instruments, and MediaTek are among some of the suppliers announcing reductions in manufacturing for the upcoming year. There is a lot of uncertainty about how the markets will fare and inventory levels will be more of a focus point then ever before."

IDC does not expect the downturn in mobile phone shipments to stretch past 2009. By 2010, the worldwide mobile phone market will show signs of improvement as economic recovery plans will have taken effect. With more disposable income in hand, consumers should feel more comfortable buying a new handset, especially if the opportunity to purchase was delayed. Beyond that, further growth is expected, but at a slower pace compared to the strong double-digit growth experienced in the years prior to the decline, says IDC.

Additionally, not all segments of the mobile phone market are expected to decline. IDC expects converged mobile devices – commonly referred to as smartphones – to grow 8.9 per cent worldwide in 2009.

Lower prices are also making converged mobile devices an attractive choice for consumers. It was not long ago that these devices cost well above the $200 price point with a two year contract. As prices have come down in recent quarters, these devices have become competitive alternatives to traditional mobile phones, reported IDC.

Related Posts by Categories

Electronics Hoctro | Electrical