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Cell phone market to fall in '09, says Gartner

Posted: 27 Nov 2008     Print Version  Bookmark and Share

Keywords:cell phone sales  consumer demand  cell phone makers 

According to Gartner Inc., cell phone sales are set to drop up to 4 per cent in 2009 from this year as the economic slowdown hurts consumer demand across the world.

The world's top cell phone makers Nokia Oyj and Samsung Electronics have said the market could fall next year.

Handset makers had remained relatively unscathed by the global economic crisis this year, but successive warnings from Nokia, Qualcomm Inc. and Intel Corp. signalled a rapid deterioration of consumer electronics demand.

Research company Gartner said sales of mobile handsets in the largest region of Asia Pacific, which includes the two biggest growth markets, China and India, rose 13.8 per cent in the third quarter to 11.67 crore phones, but warned growth would come to a halt.

"We expect the global economic decline and associated drop in disposable incomes to make sales in the region almost flat during the fourth quarter of 2008," analyst Anshul Gupta said in a statement.

Gartner said the slowdown in developed markets in the region, coupled with delayed replacement purchases in emerging markets, will hurt growth there.

Shares in Nokia were 1.2 per cent lower at 10.69 euros by 0939 GMT, dragging the DJ Stoxx technology index into the red.

Third-quarter handset sales in Western Europe—the key market for sales of more expensive and more profitable smartphones—fell 8 per cent from a year ago to 4.35 crore phones.

Analyst Carolina Milanesi said in Western Europe, home market for Nokia and Sony Ericsson, all vendors in total will sell 2 crore phones less in 2008 than a year ago.

Handset vendors sold 30.85 crore mobile phones globally in July-September, with demand in emerging markets lifting sales 6 per cent from a year earlier, Gartner said.

Handset sales volumes in emerging markets surpassed developed markets in 2005.

Nokia's market share rose to 38.2 per cent in the quarter from 37.8 per cent the previous year, the research company said.

South Korea's Samsung had 17.1 per cent of the total market in the quarter, while Sony Ericsson took the No. 3 spot with 8.1 per cent.

"Its definitely not due to (Sony Ericsson's) merit. Keeping third position will be difficult," Milanesi said.

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