Smartphones Sales Predicted to Improve in 2009

ABI Research recently predicted that the sales of smartphones will improve in the year 2009. The statement comes based on its study on the shipment of mobile handsets, which include smartphones, over the last few years. ABI points out that, on the other hand, the sales for normal mobile handsets will slow.

An estimated 1.21 billion mobile handsets, including 171 million smartphones, were sold in 2008, resulting in a 5.4 percent increase in sales over the previous year. When compared with a 16 percent increase in sales in 2007 over 2006, this shows a sharp drop in sales.

Last year was not an entirely bad. In the first half, shipment of handsets hovered around the 14 percent mark, showing an improvement when compared with the previous year. However, sales in the third quarter (Q308) were only an eight percent rise. Unfortunately, the bottom fell out in Q408 with the figures falling drastically to minus ten percent.

The most obvious reasons were that some consumers were exercising sensible caution and others were experiencing nervous apprehension due to the massive slowdown in the US and global economy. Some summarized that fear is the key. "Sheer fear sapped the confidence of consumers, enterprises and corporate users across the board," says Jake Saunders, Asia-Pacific Vice-President of ABI Research (News - Alert).

Some companies did well. Samsung had positive sales percentage increase in all four quarters and its market share increased by 2.6 percent. Nokia’s market share went up by 1.8 percent and LG’s increase by 1.5 percent.

Even though Motorola (News - Alert) improved its 2007 performance, its 2008 figure shows that it has an uphill task to return to its halcyon glory days. Another big name to take a stumble was Sony Ericson. However its latest entrants in 4Q08, the Experia 1X and other smartphone product lines, received substantial critical acclaim to point towards a healthy 2009 and beyond.

Within this stormy overall handset environment, smartphones’ forecasts appear to be looking up as the trend catches on. While Blackberry’s RIM eased gently to a 0.9 percent increase of the market share, Apple’s (News - Alert) iPhone’s share rippled to 0.8 percent. This silver lining indicates that their Average Selling Price (ASP) need not drop significantly. Then, HTC (News - Alert) with its G1, which supports Google’s Android platform, made a late charge and captured critical contracts. And, of course, Palm’s Palm Pre won accolades at CES-2009.

With other handset sales struggling to grow substantially, companies are ramping up their marketing strategy for selling smartphones. This, coupled with a reasonable consumer acceptance in Q408, augurs well for the future of smartphones. Additionally, consumers feel that they are getting a lot of devices and utilities rolled into one carry-anywhere- access-anything-use-anytime advantage.