Smartphone Growth Encouraging, Yet Cell Growth Will Shrink in 2009

Posted by at 10:10 am on July 30, 2009

The worldwide mobile phone market recorded another quarter of year-over-year decline in the second quarter of 2009 (2Q09) per IDC.

According to IDC’s Worldwide Quarterly Mobile Phone Tracker, handset vendors shipped a total of 269.6 million units worldwide, down 10.8% from 302.2 million units in 2Q08. The second quarter results are an improvement from the 17.2% decrease seen during 1Q09, but ongoing challenges stemming from the economic crisis remain a factor to watch.

“The challenges from the previous nine months -“ aggressive channel destocking, foreign exchange volatility, and uncertain demand -“ continued to plague the mobile phone market in the second quarter, but were not as severe as before,” says Ramon Llamas, senior research analyst with IDC’s Mobile Devices Technology and Trends team. “Those vendors who were able to adjust quickly were rewarded with greater shipment volumes. Although this tested the handset vendors’ abilities to hit a moving target, customers reaped the benefits of lower-costs, even on key high-end devices.”

For the full year, IDC believes that the market will decline 13%, with the market outlook for 2009 remaining relatively consistent among the top vendors. The small signs of improvement were centered around consumer demand for high-end handsets and the manufacturers’ ability to shift portfolio to meet these needs.

“Among the big handset vendors, Nokia, Samsung, Research In Motion, and Apple, all beat expectations for smartphones within the second quarter,” said Ryan Reith, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “This demand for high-end mobile phones has created a price war among large mobile operators and handset vendors. Apple’s price cut on the iPhone 3G reflects a trend we expect to continue in the upcoming quarters, and one that will effectively maintain competitive pricing within mature markets.”

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