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Mobile phone recovery seen in 2010

Posted: 27 May 2009     Print Version  Bookmark and Share

Keywords:mobile phone slowdown  smartphone  semiconductor components  phone production 

According to market analysis group Future Horizons, the global financial recession has caused mobile phone unit production to plunge for the first time since 2001. The resultant mobile phone slowdown is continuing into 2009 but is expected to recover in 2010.

The total number of phones produced in 2008 was 118 crore, with a breakdown of 28.3 crore basic phones, 72.1 crore enhanced phones and 17.4 crore smartphones. In 2009 total mobile phone production will be 100 crore before climbing to 116 crore units in 2010.

However, the smartphone market will show continued growth over the period going from 17.4 crore in 2008 to 19.7 crore units in 2009 and 33.6 crore units in 2010.

Worldwide mobile phone production consists of emerging markets in countries like China, Africa and Latin America, and the replacement market in saturated regions including Western Europe and Japan.

"The total market for phones will slow as the world moves to replacement models even after the recession lifts," said Alan Brown, analyst at Future Horizons.

"Semiconductor components account for the majority of bill-of-material costs, and phone manufacturers are looking to component suppliers for cost reductions across a wide range of products, including enhanced phones and smart phones," he continued.

"Power consumption and size remain important criteria, but the price of devices for use in high-volume mobile phone terminals will become increasingly significant. Mobile phone manufacturers will expect to see the benefit of semiconductor cost-reduction programmes, and margins will be squeezed for suppliers and manufacturers throughout the forecast period. Although the typical "phone of the future" will need greater memory and processing power for multimedia and games, this will mean only a temporary halt in the long-term price decline."

-Peter Clarke
EE Times Europe

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