Gartner: Economy hits cell-phone sales

26.11.2008
Economic woes slashed cell-phone sales growth in the third quarter of this year as consumers waited longer to replace their handsets, and the market is likely to contract next year, according to Gartner.

The global slowdown affected sales in both rich and poor countries, though results varied around the world. Western Europe and Japan were hit hardest, with unit sales below those of a year earlier. Growth was strongest in the Asia-Pacific region as a whole, and sales went up in the Americas and Eastern Europe, the Middle East and Africa as well.

Handset sales worldwide grew 6 percent in the third quarter, less than half the 16 percent growth that took place in the third quarter of 2007, according to Gartner. Unit shipments of phones grew to more than 308.5 million in the quarter from 291.1 million in the third quarter of 2007.

The news will be yet more grim in 2009, when Gartner expects worldwide unit sales to decline between 1 percent and 4 percent from 2008, according to Gartner analyst Carolina Milanesi.

New users still flocked to cell phones in the third quarter, but sales of replacement phones were hit hard, the company said. For example, in the Asia-Pacific region, consumers on average were waiting eight months to replace their handsets, rather than just four months as they had previously. As a result, sales were flat or down in mature markets such as Taiwan, Korea and Australia.

Rising sales to first-time cell users in emerging markets, such as India and China, helped drive unit sales up 13.8 percent to 116.7 million units in Asia-Pacific. Emerging-market gains also drove up sales in Eastern Europe, the Middle East and Africa by 13.1 percent. Unit sales in Latin America rose 5.5 percent.