Posted by: Olga Kharif on February 10, 2009
Nomura analyst Richard Windsor sounded an alarm this morning. While most cell-phone manufacturers still expect smartphone sales to grow 10% to 20% this year, he believes that they will hardly grow at all. “I find that the industry view that there will be good growth in smartphones in 2009 to be fundamentally flawed,” Windsor writes. “I see 2 years of almost no growth before a strong bounce back in 2011.”
Could this be right? The answer to this question will determine the outlook for a wide range of companies, including Nokia, Research In Motion, Apple and HTC.
There are several reasons to think Windsor’s view may be too pessimistic. iPhone reseller AT&T activated 1.9 million subscribers in the fourth quarter. That’s way more than the 2 million units it sold in the six months of 2007 that iPhone was available. And HTC had reported brisk sales of the T-Mobile G1 device. So consumers were still buying smartphones over Christmas.
That said, I do think that 10% to 20% growth is unrealistic to expect. Already, in the third quarter of last year, smartphone sales growth has slowed to 11.5%, according to consultant Gartner. That was before the massive wave of layoffs that’s kicked off in December and January. Everyone I know is curbing their spending — on everything. People worry about job security and mortgage payments. Now is not the time to buy an expensive phone and a related high-priced service plan. So I think the truth is somewhere in the middle: We may see smartphone sales grow above zero, but below 10%.