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IDC Predicts 8.3 Percent Decline in Mobile Phone Shipments for 2009

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March 12, 2009

IDC Predicts 8.3 Percent Decline in Mobile Phone Shipments for 2009

By Patrick Barnard, Group Managing Editor, TMCnet

Would you be surprised if someone predicted the global economic crisis would result in an 8.3 percent decline in mobile phone shipments for 2009?
According to a report from market research firm IDC (News - Alert), the worldwide mobile phone market took a deep dive in the fourth quarter of 2008, as shipments fell 11.6 percent year-over-year – making it one of the worst holiday seasons for cell phone sales in seven years. The report predicts it will be a very rough 2009 for mobile device makers, with anticipated growth of -8.3% for the year.

Ryan Reith, senior research analyst with IDC's Worldwide Mobile Phone Tracker, said expectations for 2009 were negative going into the fourth quarter.

“However, worse-than-expected results and a steady flow of negative economic news are indicating that 2009 will be gloomier than predicted,” he said in a release.

He added, however, that the mobile phone market “still has plenty of room to grow on a global scale and we expect recovery will begin in the first half of 2010.”

Chipmakers are also suffering due to the decline in consumer spending on mobile devices. According to the report, many chipmakers have surplus inventory due to the fact that phone makers have scaled back production.
Countries which will see the sharpest declines in mobile device sales in 2009 include Japan, the United States and Western Europe, the report predicts. IDC hypothesizes these countries will see declines ranging from -24.6% to -12.4%. Russia is also expected to see a sharp decline in sales – and the double-digit growth rates the BRIC countries (Brazil, Russia, India, China) of the recent past will slow to a collective growth rate of 0.3%.

India will likely be the only country which sees a meaningful increase in cell phone sales for 2009.
One interesting point the report raises is that many cell phone users have a strong desire to upgrade to mobile computing devices. But the problem is, price can be a barrier to entry. Due to the ailing economy, it’s likely that most cell phone users are content to stick with their current devices for now, and are postponing previously-planned upgrades.

Still, IDC sees the potential for rapid growth of these converged mobile devices once the economy improves.

“The explosive growth of mobile applications adds a new dimension to converged mobile device growth, one that has resonated with users worldwide,” said Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team, in a release. “The success of the Apple (News - Alert) iPhone and App Store has shifted the paradigm for consumer behavior around this category, and new mobile applications pop up every day. Now that other companies are poised to launch their own mobile application sites this year, IDC expects continued growth for converged mobile devices in the face of an challenging market overall.”

Patrick Barnard is a contributing writer for TMCnet. To read more of Patrick’s articles, please visit his columnist page.

Edited by Patrick Barnard

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