The slowing economy may cut into 2009 cellular telephone shipments in the U.S. and Western Europe, but ramp-up growth in China and India is expected to continue.
Cell phone users may retain equipment longer, said Ramon Llamas, senior research analyst for mobile technology and trends with International Data Corp. in Framingham, Mass.
``People will still use them, but we expect to see people changing their habits'' in routinely replacing handsets, Llamas said.
Eamon Hoey, senior partner of telecommunications specialist Hoey Associates Management Consultants Inc. in Toronto, agreed. Users are ``not tossing away phones every two years,'' and that means fewer opportunities for manufacturers, he said.
``We will probably see the providers of cellular services give away free phones to keep their customers,'' Hoey said.
The downturn will be felt differently around the world, Llamas said in a recent telephone interview. ``Places like China and India are still trying to connect a lot of people'' lacking phone service. Nokia Corp., Motorola Inc. and, recently, Sony Ericsson Mobile Communications AB, manufacture in India to be close, and responsive, to that country's market.
But not all emerging markets want a simple phone. ``Why did Apple [Inc.] make a push for the [third-generation] iPhone in Asia and Latin America?'' Llamas asked. ``Keep an eye on smart phones.''
The mobile-device segment may contract. ``The outlook for 2009 is even more gloomy than for 2008,'' Tina Teng, senior analyst with iSuppli Corp. of El Segundo, Calif., said in a news release.
Global mobile-device shipments may decline during 2009 to 1.22 billion units from last year's 1.29 billion, iSuppli said.
Disagreeing, Yankee Group Research Inc. estimates last year's global shipments at 1.25 billion units, and projects they will grow to 1.31 billion units in 2009.
Yankee Group forecasts North American shipments should improve to 171.6 million units from last year's 170.4 million, and those in the Asia-Pacific market should jump to 604.8 million units from 562.3 million in 2008.
Shipments in Eastern Europe should grow to 132.9 million units from last year's 123.2 million, Boston-based Yankee Group said.
iSuppli said demand in India could grow to 136 million units in 2009, vs. 110 million last year.
Hoey foresees continued growth in Africa, where about 80 percent of users prepay for Celtel International or MTN Group Ltd. service through debit cards, which costs less than the post-paid model traditional in the U.S.
Service providers are ``all bracing for more competition from the Chinese'' with look-alike products, Hoey said in a telephone interview. A near-equivalent iPhone may cost one-third of the standard retail price.
Market-dominant Nokia Oyj of Espoo, Finland, introduced its 3G N97 smart phone which it calls ``a true mobile computer'' with a touch display, qwerty slide-out keyboard and 5-megapixel camera.
Nokia is entering the market to connect laptop computers and wireless networks, competing primarily with Huawei Technologies Co. Ltd. of Shenzhen, China. Nokia's 3G experience positions it to become a provider for high-speed-packet-access modem services. Operator subsidies drive sales of HSPA-enabled mobiles in the emerging 3.5G market.
Research from J.Gold Associates LLC of Northborough, Mass., corroborates Nokia's plan. J.Gold's poll of 340 large and small companies projects that 2009-11 business use of smart phones in the U.S. and Western Europe will increase four times faster than notebook computer use.
Business applications for smart phones will grow at twice the rate of notebook uses, J.Gold said. Access to corporate applications from smart phone devices are expected to increase 71 percent during 2009, with notebooks experiencing much slower growth.
Research In Motion Ltd. of Waterloo, Ontario, anticipates solid growth for its new 3G BlackBerry smart phones, while Apple of Cupertino, Calif., expects wider distribution and lower pricing for the iPhone.
Gartner Inc. in Edham, England, said global smart phone sales to end users totaled 36.5 million units for the third quarter, up 11.5 percent from 2007.
Nokia had third-quarter sales of 15.5 million smart phones; RIM, 5.8 million; Apple, 4.7 million; HTC Corp. of Taoyuan, Taiwan, 1.7 million; and Sharp Corp. of Osaka, Japan, 1.2 million.