Sales trends of Cell Phone Sales: Drop

Mobile phone shipments will decline by more than 2% in 2009 when compared with this year, the largest decline since 2001, according to a forecast from IDC released last week. IDC blamed the global economic crisis for the falloff, noting that handset makers, network operators and component suppliers have all discussed their concerns about prospects for 2009. Ryan Reith, an analyst for IDC, noted that phone maker Nokia has already predicted a decline. But he said that "real concerns set in" when mobile phone chipset vendors such as Qualcomm Inc., Texas Instruments and MediaTek announced reductions in manufacturing for the coming year. Those reductions will affect the entire mobile phone market, although IDC predicts that shipments in the smartphone segment will grow nearly 9% next year worldwide. Lower prices for smartphones will help. IDC did not release actual numbers for annual shipments, but noted that growth in the total mobile phone market globally was up 7% this year compared to 2007. After a decline of 2.2% in 2009, IDC expects a rebound and believes the total market globally will grow by 7.7% in 2010. For the U.S. alone, IDC said there has already been a slight decline in mobile phone shipments in 2008, which will result in a 0.3% decline by the end of the year. In 2009, the U.S. decline will be four times greater than the global falloff, dropping 8.7%. In 2010, the mobile phone shipments in the U.S. will decline again, and is projected to be off by 0.7%. But smartphone shipments will increase in 2009 in the U.S. by 3%, IDC said. In November, Gartner Inc. predicted a decline in sales of mobile phones globally in 2009 of between 1% and 4%. Gartner said about 308 million phones shipped in the third quarter of 2008. IDC also said consumers will have less disposable income and may choose to hold onto their current devices rather than replace them or upgrade them. As long as a device functions properly, consumers might put off a replacement when the service contract expires, IDC said in a statement. The good news is that IDC doesn't expect the mobile phone shipment downturn to stretch beyond 2009 although growth in 2010 and beyond will be slower than the double-digit growth experienced in recent years, the analyst firm said.