Mobile Phone Market to Shrink in 2009

[Pete Paxton]

<div class='os_post_top_link'><a href='http://news.yahoo.com/s/nm/20081216/tc_nm/us_cellphones_market_2' target='_blank'>http://news.yahoo.com/s/nm/20081216...phones_market_2</a><br /><br /></div><p><em>"Mobile phone sales will shrink next year at their fastest pace ever as consumers cut spending, a Reuters poll showed, with analysts increasingly concerned about unsold phones piling up in stores. On average, the poll of 36 analysts shows global market volumes shrinking 6.6 percent next year and 5.7 percent in the fourth quarter -- traditionally the strongest period for the industry due to holiday sales."</em></p><p><em><img src="http://images.thoughtsmedia.com/resizer/thumbs/size/600/spt/auto/1229453984.usr11642.jpg" style="border: 0;" /></em></p><p>So it looks like the financial woes will be hitting the mobile phone market shortly. Not a real surprise I guess. I wonder if that means there will be some&nbsp;substantial&nbsp;discounts in the future. Wonder what part of the mobile world will be hit hardest? Do you think smartphones will be hit as hard or harder than the rest of the cell phone industry? I wonder how bad or not so bad it will really get? What do you all think? Are any of you planning to buy a device next year?&nbsp;</p><p><em></em></p><p><em></em></p>

[Ed@Brighthand]

> Do you think smartphones will be hit as hard or harder than the rest of the
> cell phone industry?

Smartphone sales will be less affected. Sales of regular phones in the U.S. have been in a year-over-year decline since this summer. At the same time, sales of smartphones are up. The smartphone market isn't growing as crazy fast as it has at some points in the past, but it's still showing double-digit growth.
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[Vincent Ferrari]

> Do you think smartphones will be hit as hard or harder than the rest of the
> cell phone industry?

Smartphone sales will be less affected. Sales of regular phones in the U.S. have been in a year-over-year decline since this summer. At the same time, sales of smartphones are up. The smartphone market isn't growing as crazy fast as it has at some points in the past, but it's still showing double-digit growth.
.

I can tell you, as someone in the wireless business, and as someone who has been in the business for 11 years that we're just not seeing the numbers and growth everyone is talking about with Smartphones. At a sales meeting recently, we were discussing the numbers and the general consensus is that people are starting to revert back to cheap feature-flips such as the Razr and phones of that ilk.

Smartphones haven't been commoditized enough yet to be the free phones that people will be willing to go for plus they still need to tack a data plan on after activation. I don't know how long the trend is going to last, but that's what we're seeing and our numbers bear it out.

None of that means that smart phones are going away, but the market for them isn't where it was and the cheapo phone is definitely 100% back and getting better. It'll be interesting to see how long that trend lasts.

Again, this is only what we're seeing and I don't know if we're representative of an entire industry, but I just wanted to put that out there.

[Stinger]

Both Sony Ericsson and Motorola are at the 'desperate gamble' stage in their problems.

I think we're going to see some very interesting products from both of them. However, I still don't think that either will be making handsets in three years time. Things are going to look very different in a few years time.

As for the smartphone market, I think there's enough innovation around for it to continue to grow. The iPhone is still seeing strong sales in the US and apparently Nokia's new touchscreen product has been flying off the shelves in Russia/Asia too. I reckon that the smartphone sector will outperform the rest of the market.