iSuppli: Handset Shipments Return to Growth

Posted by: Olga Kharif on July 31, 2009

Nokia, Samsung, LG and Motorola have a reason to rejoice: Sales of handsets are starting to pick up. Global shipments of cell phones rose 4.7% in the second quarter, ending nine month of sales declines, according to consultant iSuppli.

“The moderate increase indicates the worldwide mobile handset market is bottoming out and now is returning to growth,” according to analyst Tina Teng, who authored the report. “Much of the growth was generated by two emerging regions: the Middle East and Latin America. Furthermore, several aggressive promotional campaigns boosted sales in North America, with regional shipments rising by 8% during the period.”

Now, the future looks bright. Shipments should rise 6%, to 280.9 million handsets, in the third quarter, and by another 8.3% in the fourth quarter, which is seasonally strongest. Despite the quarterly growth, shipments for the full year are still expected to contract by 9.9%, to 1.1 billion units, down from 1.23 billion in 2008.

Handset shipments declined by 0.3% in the third quarter of 2008, by 2.6% in the fourth quarter of last year and by 16.4% in the first quarter of 2009. By the first quarter of 2009, shipments had fallen by 58.8 million units compared to before the economic downturn began in the second quarter of 2008.

That said, not everyone agrees that the handset industry has seen its worst days yet. As my colleague Andy Reinhardt points out in his post, researcher Strategy Analytics believes that cell-phone sales actually declined in the second quarter.

Reader Comments

Interconnect

August 2, 2009 10:10 AM

The smart phone market has not taken off in the Middle East Region particularly in the Indo-Pak subcontinent because its not focused for this product. In market as Pakistan with ready market for 60% of 190 million population for the smart phone. OS as Linux, Windows, Android based smart phones are as yet launched in the market. Local franchises are fleecing with the junk Symbian OS based smart phones at exorbitant prices. Hence the market didn't took off. Now prices averaging $100-00 for smart phones with Windows based etc., there still is and will be a big market of the sub-continent if the distributor consumer chain is maintained with competetive prices as in the US, Far East region etc. Samsung, LG still sold at bulk premium than in other international markets, hence curtailing the consumer buying power. Average smart phone cost around $500-00 which average US$100-00 imagine the mark up.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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