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Operators and Distributors Go Shopping for 269 Million Handsets
Posted: 24-Jul-2009 [Source: ABI Research]

[Some bright spots start to emerge out of a frosty handset market, according to an ABI Research report.]

New York -- The handset vendors are still telling us it is a frosty market out there but there is a spring in their step as 2Q-2009 results start to pour in.

“269 million handsets were shipped in 2Q-2009,” says Jake Saunders, VP for Forecasting at ABI Research. “That bodes well for 2H-2009. Shipments should build sequentially in a constructive manner with 4Q-2009 potentially returning the industry to better sales form.” North America may be struggling to shrug off its economic woes but Asian economies have been lifted by regional stimulus packages and by an anticipation of improved retail sales conditions in the latter part of 2H-2009. ABI Research is revising downwards its forecast 2009 contraction to -7.5% from -8.1% (1.11 billion).

Samsung (19.4%) and LG (11.1%) did particularly well. LG notched up a 2.2% increase in percentage points, Samsung, 1.45%. Nokia staged a remarkable swing in fortunes to achieve a 1.67% percentage point increase to 38.3%. Nokia is doing all it can to get a number of smartphone models into the market. It will be interesting to see how Nokia’s market share holds up in 2H-2009, as Samsung and LG have carried out major refreshes to their smartphone product lineups. Sony-Ericsson experienced a 0.56% percent point reduction in its market-share while Motorola and RIM also saw contractions.

“It is well documented that smartphones are proving to be one of the main engines of growth, but they are not just benefiting the Tier 1 players”, says practice director Kevin Burden. “A number of Tier 3 vendors are also making headway in a competitive market, including Apple and HTC but also vendors such as Huawei and ZTE. While a consolidation is widely expected in the industry, it will not be happening in 2009.”

The pressures for consolidation may not necessarily come from tightening shipment volumes but also from greater integration of hardware, OS and applications development. ASPs for smartphones are higher than the overall average, and have supported R&D to date; but in such a competitive environment, the R&D pricetag can only go up.

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