Drop in Q4 cellular sales

The global economic downturn has had a significant impact on the mobile phone industry. This is according to a Gartner survey, which shows mobile phone sales of 314.7 million units, declining by 4.6% in the fourth quarter of 2008 compared with the same period the previous year.

The top five mobile phone vendors have all experienced a slump in sales, says Gartner. The industry did, however, experience growth for the year, with worldwide mobile phone sales to end-users surpassing 1.22 billion units in 2008, a 6% increase over 2007 sales.

Carolina Milanesi, Gartner research director for mobile devices, says: “Mobile phones have traditionally been one of consumers' preferred presents for Christmas. However, in the fourth quarter of 2008, consumers were concerned about taking on the contract associated with the most attractive products on the market. Consequently, mobile devices in both emerging and developed markets experienced the lowest quarter-on-quarter growth (2%) recorded in a fourth quarter.”

Milanesi predicts efforts to reduce inventory will intensify in the first quarter of 2009 and continue into the second quarter. In the second half of this year, she says the channel will have to start restocking, and this will help sell-in volumes. However, this will not mark the start of a market recovery, as Gartner does not expect demand to stabilise anytime before 2010.

Nokia sold nearly 119 million mobile phones in the fourth quarter of 2008, giving it a market share of 37.7%. Samsung was able to grow share sequentially and also year-on-year, as products such as the Tocco, Innov8 and Omnia continued to drive sales in regions such as Western Europe and Asia/Pacific. LG took third place and Sony Ericsson's sales dropped to 23.6 million units, putting it in fourth place. Motorola took fifth place, with a drop in market share by 5.6 percentage points.

In Europe, the Middle East and Africa, mobile handset sales in the fourth quarter of 2008 grew sequentially by 2.5% to 59.3 million units, bringing the market for the full year to 229.5 million units.