Global mobile phone shipments in 2009 will be down by 9.1 according to the latest forecasts from Ovum.
All regions, even those in emerging markets, will be hit to some extent by the downturn. Shipments will start to recover from 2010 onwards, although it will take until 2012 before global volumes are back to the level seen in 2008.
Collapse of mid-tier handset market
The downturn has had a polarizing effect on the handset market with vendors and mobile operators focusing on two types of handset: the low-end and high-end. This in turn has quickened the replacement of 2G in favour of 3G handsets, with high-end 2G handset shipments suffering the most from the shift.
The downturn has artificially extended replacement rates for handsets during 2009. However, because of the collapse of the mid-tier and subsequent focus on high-end 3G handsets, Ovum expects a move towards longer replacement rates well into the forecast period even after recovery.
The primary driver for growth is from volumes in emerging markets, such as Asia-Pacific where the number of people being connected is still fuelling handset shipments. However, shipment growth will trend below connection growth due to a strong second-hand market in these regions.
The secondary driver for growth is from the replacement of 2G networks with 3G networks, which will impact mature markets first. This will drive shipments of 3G devices – those enabled for HSPA, TD-SCDMA and 1XEV-DO networks. Beyond 2012 a majority of handsets will be based on 3G technologies, even if they are bound for 2G networks (such as GPRS, CDMA2000). This effect will be slower in emerging markets while there is still growth for ultra-low cost 2G handsets.
After the introduction of LTE data cards and USM modems (expected by 2010), Ovum expects to see LTE-based handsets entering the market between 2012 and 2013. The handsets will be seen first in markets where operators have aggressive LTE deployment plans such as North America, LTE will not hit mass market volumes until after 2014.