News From Telecom World

Global economic recession to crunch mobile phone market in 2009

Posted on: December 21, 2008

The economic recession in the global market as a whole has affected people on a macro level as companies are cutting down on costs which have in turn led to job cuts or salary and pension cut. This credit crunch has affected the lives of people on a micro level also, as they are cutting down their expenditure on luxury as well as commodity goods. Mobile phones, which have now become a necessity for people, according to a recent study will see sale shrinkage in 2009. The operators already fear the piling up of unsold handsets in stores.

A recent survey unveils that the global mobile phone market will see a fall of 6.6% in 2009 and 5.7% in Q4′08, wherein the sales reach a peak with the festivity around.
The world’s largest handset makers, Nokia, have already trimmed its 2009 forecasts, warning a negative growth in the mobile phone market. It has also being seen that Sony and Samsung Electronics have axed jobs and given out profit warnings respectively. The study further reveals that due to a slowered recovery from the fiscal lean period, has called for contraction in the market, ranging from 5-10%. The European market wherein the margins are greater the high end mobile phones sales are huge, which is now likely to fall steeply in 2009. The sale of mobile phones in emerging markets comprises of two-thirds of the total sales globally in 2008. Mobile Phone makers were ready for the recession but their question of concern was the possible build-up of large inventories, as in 2001. Contrarily, the vendors are looking forward to reach their targets in 2009, which could call for an oversupply of handsets in Q1′09.

LG anticipates a slowered sale of mobile phones in 2009 and still obtain Sony’s no.3 position. Whereas, Nokia and Samsung Electronics are set to end 2009 with stronger market share, anticipated at 39.6% and 17.3% respectively.
Oddly, Motorola would lose the most market share, with the wide range of estimates, from 55 million to 100.7 million phones, reflecting the uncertainties over the company’s future.

Source: Wireless Federation

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