Mobile phone market on road to recovery

By Peter Dinham
Sunday, 01 November 2009 10:55

Mobility

The worldwide mobile phone market is showing the first signs of improvement since the start of the global economic crisis, with IDC reporting mild sequential growth in the third quarter this year and vendors “setting the stage for further gains by launching their flagship devices to meet pent up demand.”

According to IDC, year-on-year growth remained negative, but improved from the first half of 2009, with mobile phone shipments totalling 287.1 million units worldwide in 3Q09, which was down six percent from a year earlier, but up five-point six percent from the second quarter.

Ramon Llamas, senior research analyst with IDC's mobile devices technology and trends team, said during the third quarter, “we saw a number of channels promoting older devices at significantly lower prices. For many, this was enough to spur demand and push volumes higher. Now that we have moved into the fourth quarter, vendors are setting the stage for further gains by launching their flagship devices to meet pent-up demand."
 
His IDC colleague, Will Stofega, said that although some regions are still “reeling from problems associated with the economic crisis,” the third quarter served to “cleanse the channel while providing the signs of stability necessary for additional improvement in the fourth quarter.

Stofega said that despite the outlook for a slower economic recovery, IDC thought vendors should “increase R&D spending as well as engage in a broad portfolio review in order to ensure the best competitive stance as the market recovers."

IDC’s regional analysis of the market showed that the North American market posted mixed results for 3Q09, with the United States posting positive results, with converged mobile devices and prepaid handsets “once again driving growth,” contrasting with the Canadian mobile phone market which it said “declined for the third straight quarter despite double-digit converged mobile device growth,” and the “tepid Canadian economy, shrinking traditional phone segment, and inventory clear out by the largest service providers led to the market's weaker three-month performance.”

For the Asia-Pacific market, IDC reports that the third quarter was a weaker than anticipated, with total shipments down slightly from a year ago. According to IDC, key emerging markets, including China, India, and Indonesia, all posted slight declines, “signalling that recovery may take longer than expected. Still, demand for converged mobile devices was strong, posting double-digit increases year over year.”

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