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Handset shipments to drop by 9% in 2009

Handset shipments to drop by 9%

Mobile phone shipments in 2009 are forecast to be down globally by about 9.1 per cent, according to  figures released this week by market analyst Ovum, as economic gloom continues to cloud the horizon.

All regions are likely to suffer the effects of the credit crunch, and even those in emerging markets will be hit to some extent by the downturn. While  Ovum anticipates that shipments will start to recover from 2010 onwards, it will take until 2012 before global volumes are back to the level seen in 2008, the analyst firm said.

During 2009 demand for mid-tier handsets has collapsed. This has had a polarising effect on the handset market forcing vendors and mobile operators to focus only on the low end and/or high end segments. According to Ovum principal analyst Adam Leach, this in turn has quickened the replacement of 2G in favour of 3G handsets, with high end 2G handset shipments suffering the most from the shift.

Looking to the future, Ovum expects that mobile phone shipments will grow at a CAGR of 1.9 per cent and reach 1.4 billion by 2014, driven by uptake in emerging markets. “Connection growth in these regions is still fuelling handset shipments; however, shipment growth will trend below connection growth due to a strong second hand market in these regions”, said Leach.

The secondary upside driver for growth is from the replacement of 2G networks with 3G networks, which will impact mature markets first, driving shipments of 3G devices such as those enabled for HSPA, TD-SCDMA and 1XEV-DO. In fact, beyond 2012 a majority of handsets will be based on 3G technologies even if they are bound for 2G networks, although the researcher notes that this effect will be slower in emerging markets while there is still growth for ultra low cost 2G handsets.

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