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Mobile phone market to drop 13% in 2009 says IDC

Worldwide shipments of mobile phones to decline by 13% this year says research company

Smartphone demand is still strong, but the overall market will decline in 2009 says IDC.
Smartphone demand is still strong, but the overall market will decline in 2009 says IDC.

IDC is predicting that the worldwide mobile phone market will decline by 13% in 2009. Shipments of mobile phones have been hit by the overall economic situation, the research company said.

In Q2 09, shipments declined by 10.8% year-on-year, down to 269.6 million units worldwide from 302.2 million units in the same quarter last year. The results marked another quarter of declining shipments, although IDC said that the results were better than the 17.2% slump in the first quarter of this year.

Ramon Llamas, senior research analyst with IDC's Mobile Devices Technology and Trends team commented: “The challenges from the previous nine months – aggressive channel destocking, foreign exchange volatility, and uncertain demand – continued to plague the mobile phone market in the second quarter, but were not as severe as before.

“Those vendors who were able to adjust quickly were rewarded with greater shipment volumes. Although this tested the handset vendors’ abilities to hit a moving target, customers reaped the benefits of lower-costs, even on key high-end devices,” he added.

The Central and Eastern Europe, Middle East and Africa region saw shipments up by 15% in Q2 from Q1 of 2009, following two quarters of decline. IDC said that the prior decline was mainly due to inventory being squeezed out of channels due to lack of financing, and that the improvement in shipments this quarter suggested that the process was now complete, and underlying demand remains strong.

Overall demand for smartphones and high end handsets remained strong, which helped several of the leading players, according to IDC.

Ryan Reith, senior research analyst with IDC's Worldwide Quarterly Mobile Phone Tracker said: “Among the big handset vendors, Nokia, Samsung, Research In Motion, and Apple, all beat expectations for smartphones within the second quarter. This demand for high-end mobile phones has created a price war among large mobile operators and handset vendors. Apple’s price cut on the iPhone 3G reflects a trend we expect to continue in the upcoming quarters, and one that will effectively maintain competitive pricing within mature markets.”