Mobile Phone Market to See Negative Growth in 2009

It seems that the mobile phone market will see a rather negative growth in 2009, although the second half of the year is expected to be a better one. The previsions vary across different market areas, according to the speed and depth of the global downturn. One thing that almost all forecasts seem to agree on is the fact that the turmoil will outpace the 2001 downturn caused by the bursting dot-com bubble.

This time around, the slowdown is led by the weakened demand on the market, complemented by a large inventory in the channel, which is expected to need about two quarters to clear. While last year smartphone sales reached an impressive 40 percent year-on-year growth in the third quarter, this year they are also expected to drop. Some recovery is predicted for 2009, and a couple of carriers are said to give it a hand, at least in the United States.

The stronger brands on the market are projected to gain more share, while smaller players might pull back. The forecasts nominate Nokia Corp. as the big winner of the highest market share this year. Even so, some analysts also say that the smartphone sector is not a very secure one, and that even Nokia might experience some issues in the area. Other vulnerable large players are considered to be Sony Ericsson Mobile Communications, Motorola Inc. and Palm Inc.

This year could be a very slow one for some of the industry names, as analysts expect the market to recover only in 2010. Nokia has already announced a 5 percent growth, yet some voices consider the company to be rather conservative about the overall market in 2009. A delicate forecast of a negative 5.6 percent growth has been issued by iSuppli as well.

Other projections also point towards a negative growth of the market, and only the smartphone segment is expected to see better scenarios. “It’s hard to keep pace with a deteriorating situation,” Bonny Joy at Strategy Analytics said. “No one has great visibility right now, not even Nokia.”

“The strong brands and platforms will get stronger, and the also-rans are going to have a tough time finding any buyers at all,” said Avi Greengart, analyst at Current Analysis.