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Slowdown ahead for handset market

Posted: 29 Dec 2008     Print Version  Bookmark and Share

Keywords:mobile phone  shipment  consumer behaviour  smarphones 

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.

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% worldwide in 2009. This contrasts sharply against the negative growth expected for the entire mobile phone market. Beyond 2009, growth will return to double-digit territory, faster than the overall mobile phone market.

IDC forecast

"Converged mobile devices remain a much sought-after option for many consumers," noted Ramon Llamas, senior analyst, Mobile Devices Technology and Trends. "Users have come to realise what these devices can do beyond voice telephony, especially when it comes to running applications. Take a look at how gaming, mapping and location, entertainment, news, and social networking applications for converged mobile devices have taken off, allowing users to do much more than just make phone calls. In response, handset vendors have been building their product and applications portfolios to catch this wave of opportunity."

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 Rs.10,007.28 ($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.

Faced with the option of purchasing a converged mobile device at roughly the same price as a traditional mobile phone, consumers will be strongly tempted by the fully featured smartphone. Continued high demand and lower prices will keep this category growing, even as the overall market struggles.

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