Electronics Production | January 29, 2010

Global mobile phone market on the rise again

The worldwide mobile phone market grew 11.3% in the 4Q/2009, ending five consecutive quarters of retrenchment, according to IDC. Vendors shipped 325.3 million units in 4Q/09 compared to 292.4 million units in 4Q/2008.
Vendors shipped a total of 1.13 billion units on a cumulative worldwide basis in 2009, down 5.2% from the 1.19 billion units shipped in 2008.

"The mobile phone market has rebounded in dramatic fashion," said Kevin Restivo, senior research analyst with IDC's Mobile Phone Tracker. "The Asia/Pacific region and the United States were primarily responsible for pushing the market back into growth territory. Overall, vendors offered a wide array of converged mobile devices (smartphones) and messaging devices in the seasonally strong fourth quarter, to take advantage of increased user demand."

"One area of the market that has consistently shown growth all year is the converged mobile device market," said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team. "Consumer tastes for mobile phones have increasingly shifted from simple voice telephony to greater data usage, and both handset vendors and carriers have been eager to meet demand despite ongoing economic challenges. IDC believes that the converged mobile device market grew nearly 30% year over year, and that the market will continue to gain momentum as device selection increases and price decreases continue into 2010 and beyond."

Market Outlook
IDC anticipates that the worldwide mobile phone market will rebound in 2010. "In 2009, the mobile phone market, like many others, contracted due to economic pressures. But as the year progressed, demand for mobile phones increased each quarter while year-over-year declines progressively decreased," adds Llamas. "Economic recovery mixed with pent-up demand will create positive conditions for handset vendors in both developed and emerging markets in 2010. Meanwhile, key handset vendors expect to exceed their 2009 shipment levels with refreshed portfolios, leveraging interest in touchscreens, messaging devices, and converged mobile devices."

Regional Analysis
- In Asia/Pacific (excluding Japan), 2009 as a whole was relatively flat year on year, marked by a stronger preference for low-cost handsets in China and India as users substituted away from more expensive options under recessionary pressure. However, the Asia/Pacific market saw strong gains in 4Q09, reflecting a strong start to recovery. Touchscreen-enabled devices remained a hot segment of the market, helping to drive the demand for converged mobile devices across the region.

- The Western European handset market grew on both a year-over-year and sequential basis in 4Q09. LG Electronics and Samsung performed particularly well thanks to their collective strength in the traditional mobile phones segment while Apple, Nokia, and Research In Motion helped sustain growth in the converged mobile device market. On a full-year basis, however, shipments into the region still declined as the improved second-half performance was not enough to offset the declines in the first half. In CEMA (Central and Eastern Europe, Middle East, and Africa), vendors found pockets of improvement during 4Q09, but overall sales in the region were focused on entry-level handsets targeted at first-time users.

- The North American market finished 2009 relatively strong posting the second-highest regional growth after the Asia/Pacific region (excluding Japan). Converged mobile devices remained in high demand in the fourth quarter due to a combination of lower priced devices and rate plans as well as greater user and carrier interest. However, feature phones accounted for the majority of shipments last year despite an overall volume decrease on a year-over-year basis. In Canada, mobile phone shipment volumes were buoyed by the introduction of a new wireless network, which increased the demand for smartphones, particularly the Apple iPhone.

- The Latin American mobile phone market shrunk in the fourth quarter. However, the performance marked an improvement from the double-digit declines posted in previous quarters. Stronger Brazilian currency pushed prices for mobile phone imports lower, spurring greater demand. In Argentina, channel partners purchased additional product ahead of a new tax rate that came into effect in December. Finally, the popularity of pre-paid service options across the regions included more converged mobile devices, stoking greater demand from vendors.


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