As the economy continues to spiral downhill, more analysts are expecting mobile-phone sales to shrink next year, which will mark the first time since 2001, according to a poll conducted by Reuters. The survey found that 8 out of 22 analysts are even less bullish, and expect the market to decline next year, however, the overall majority still predicts a moderate growth rate of 3 percent in both Q4 and 2009. At that rate, it will be far below the 10 percent average enjoyed over recent years, and offers a much worse prognosis than even a month ago when a similar poll was conducted. In that poll, only one analyst out of 23 said sales would fall, and then only slightly. What’s most worrisome about this news is that the fourth quarter is traditionally the banner part of the year for the industry, in which spending increases as phones are given away as presents. Analysts now expect Q4 growth to be around 11.6 percent, which is more conservative than Nokia’s expectation of 13.5 percent.
This downturn could affect the mobile phone industry differently than the one experienced in 2001. During that crash, replacement sales tumbled, but in the U.S., the market for first-time subscribers continued to grow because the penetration rate of cell phones was so low. Now that it is in the 80-percent range, first-time sales are already decreasing. In Europe, where almost everybody has a phone, the market is set to fall already this year, and will likely continue to fall next year. In emerging markets, analysts are still positive, believeing they could be the key for a strong 2009. In 2005, sales in emerging markets surpassed developed markets in 2005, and this year around two-thirds of sales are in emerging markets.
Photo Credit: Gaetan Lee