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Handsets shipped in Q1 hit 25.8 crore

Posted: 05 May 2009     Print Version  Bookmark and Share

Keywords:mobile handset  handset vendors  handset forecasts  smartphone 

Recent data from ABI Research shows that the tough economic environment did not heavily impact the handset-buying public. Handset vendors had shipped 25.8 crore handsets by the end of the first quarter of 2009.

Although that represents an 11% year-over-year decline, the result significantly exceeded the previous forecast of 25.35 crore. "Green shoots are sprouting," is how ABI Research vice president Jake Saunders describes the latest figures.

Distributors reduced their inventories in 4Q-2008 and 1Q-2009 as they prepared for economic Armageddon but the market did not take another "leg down" in 1Q-2009. ABI Research has introduced a note of mild optimism in its handset forecasts for YE-2009, revising them from -8.4% to -8%. Saunders notes, "This will not be a V-shaped recovery. 2Q-2008 was a fairly strong quarter for handset sales so handset shipments for 2Q-2009 are going to report a -10% decline YoY, but QoQ, they should show improvement."

"As always there are winners and losers," comments practice director Kevin Burden. "Samsung and LG demonstrated healthy gains to take their market shares to 17.8% and 8.8% respectively. Another star performer was RIM which raised its share to 3.0% due largely to the success of its Blackberry Bold. It is a little curious that Apple's market share is just 1.5% given the success of its AppStore. As popular as the iPhone3G has been, increased competition in the touchscreen segment and a lack of product differentiation may be dampening demand. ABI Research expects that by 2H-2009 the iPhone3G will have one or more siblings. That will allow Apple to accelerate growth.

Nokia was beaten out by SonyEricsson for the dubious distinction of showing the largest contractions (their shares now stand at 36.2% and 5.6%). Nokia will breathe a sigh of relief once its latest smartphone, the N97, enters the market. Nokia has had a fair amount of success with the E71 but needs to beef up its touchscreen product lines. While Sony-Ericsson has the Experia smartphone line-up, the firm's exposure to the feature phone segment was squeezed more than other handset sectors. While feature phones serve many needs in the market, operators have been especially keen to snap up smartphone stock and were cooler on the Ultra-Low Cost and feature phone orders.

Despite the positive signs, says ABI Research, the industry should be cautious. The IMF has issued another sharp downgrade to its global outlook. Unemployment figures are also likely to continue creeping up. Buyers in the developed world are still concerned about debt and job security. Developing economies are expected to take a hit on the credit side which could have knock-on consequences on credit lines for purchases and stock levels.

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