Smartphone market holds up, rest of mobile market declines

Peter Dinham
Thursday, 16 April 2009 18:25

Business IT - Technology

The financial crisis has hit the overall mobile phone market in Australia, with a 16 percent decline in sales last year, but there was some joy amidst the gloom and doom with the smartphone segment defying the recession and growing by 7.6 percent.

The overall decline in mobile phone sales still saw just under three million phones sold in 2008 – 2.98 million units to be precise, and IDC says the majority of the year-on-year decline in the fourth quarter was due to the “unsustainable boom caused by Telstra’s CDMA to Next G migration in Q4 2007, and less significantly to the actual effects of the slowing economy.

However, while smartphone sales have been up, Mark Novosel, market analyst, telecommunications at IDC, says that the high-end of that market is poised to take a hit throughout 2009 and, conversely he predicts that more affordable mid-range converged devices should perform strongly as consumer demand for these devices remains strong.

"Converged devices available around the $49 per month price-point should do well in 2009. It's difficult to imagine anyone giving up their mobile phone despite growing negativity in the economy, however, it is likely some consumers on higher plans will start cutting back on their mobile spend when it's time to renew their contract," adds Novosel.

IDC says that, despite flow-on effects from the decline of the Australian dollar in the second half of 2008, resulting in increased device prices and decreased discounting, there is a growing portfolio of capable mid-range converged devices to tempt consumers.

According to Novosel, the iPhone 3G hype from 2008 has largely faded, with shipments falling 26.9% Q/Q., with carriers around the world cutting iPhone prices in the lead-up to an expected new iPhone announcement in the first half of 2009.
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