Mobile phone sales set to suffer into 2010

 

Gallery

By Reuters

Posted on 20 May 2009 at 17:36

A new report from Gartner suggests mobile phone sales could continue to suffer well into 2010.

The report claims that global sales in the handset market fell 9.4% in the first quarter of 2009, with Gartner predicting it may be the second half of 2010 before demand picks up once again.

The news will make grim reading for mobile phone makers, especially with a number of analysts suggesting that the April-June quarter could be the worst yet, with sales expected to slump 14.5%. Nokia has already reported its first-ever quarterly loss.

Gartner, which tracks changes in inventory and actual sales to consumers, says retailers sold some 25 million phones from inventories in the first quarter. It expects inventory reduction to continue in the second quarter, but at a pace of 10-12 million phones.

"Trends in the key UK and Spanish markets remain worrisome and consumer behaviour across Europe continues shifting. People exiting 18- or 24-month plans drift toward prepaid phones or cheap monthly plans," says Global Crown analyst Tero Kuittinen.

One possible bright spot amidst the gloom is the increasing sales of smartphones. Gartner claims 36.4 million smartphones were sold in the first quarter, up 12.7% from a year ago.

The firm expects this growth to continue, boosted by the emergence of new models from Apple, Palm, RIM and Nokia. Gartner is predicting growth of around 27% for this sector, though most other analysts are playing it safe with forecasts closer to 10% and 20%.