Worldwide mobile handset sales in 2009 weren't as poor as was feared, but going forward, pressures remain on manufacturers, according to a Dec. 15 report from Gartner.
During the third quarter of 2009, strong sales in Western Europe and accelerated sales in the gray market helped worldwide mobile device sales to end users to reach 1.214 billion units for the year. This left sales for the year finishing essentially flat, or just 0.67 percent below 2008 numbers.
For 2010, Gartner is now predicting a 9 percent jump from 2009 sales. Replacement cycles in 2009 were slowed by the economy, but in two years, these are expected to return to normal, with the introduction of shorter smartphone contracts and more aggressive pricing. Come 2010, second-hand sales in emerging markets and global SIM-only sales are expected to begin stabilizing, before working toward a decrease in 2011.
"Despite a projected return to growth in 2010, the times of 20 percent growth are certainly over as mature markets are saturated and most growth will come from emerging markets," Carolina Milanesi, an analyst with Gartner, wrote in the report. "Pressure will remain for manufacturers to sustain and grow margins as [average selling prices, or ASPs] continues to decline. Software, services and content will be much bigger drivers than hardware, pushing traditional mobile phone vendors to reinvent themselves to remain at the top of their game."
Milanesi added that the phenomenon of grey market, or "white label" devices, "generated by Chinese device manufacturers who do not have a license to sell and manufacture devices without a valid internal mobile equipment identity," is no longer limited to China.
"All manufacturers will have to compete with gray-market players as they expand into emerging markets in Asia/Pacific, Eastern Europe, the Middle East and Latin America and bring a lower weighted [ASPs]," wrote Milanesi. "The gray market will affect Nokia's market share the most."
In 2009, smartphones will represent 14 percent of total mobile device sales - a growth of 23.6 percent from 2008. By 2013, they're projected to exceed 2008 numbers by 38 percent.
"However, this positive outlook could be negatively impacted by mobile operators' decision to associate all smartphones with high flat-rate data plans, which could increase the total cost of ownership beyond mass-market consumer acceptance," Milanesi warned. Still, she continued, "Gartner expects global ASPs for enhanced phones and smartphones to decline by 3 percent in 2010."
The Asia/Pacific region leads mobile device sales to end users, having contributed 479.8 million devices to 2009's total of 1.214 billion. In 2010, Asia/Pacific is expected to ship 546.7 million devices, contributing to a worldwide total of 1.322 billion mobile devies to end users.
Western Europe is the second-largest sales region, shipping 186.9 million mobile devices in 2009, and with an expected 198.4 million for 2010, while North America ranks third, with 182.5 million mobile devices shipped to end users in 2009, and 190.1 million expected for 2010.