For Wireless Handsets, 2010 Will Be the Year the Bleeding Stops

• Posted: Sunday, March 29, 2009
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• Author: pradhana
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• Filed under: Handset

No matter who you ask, the assessment is the same: 2009 will be a bad year for cellular handset sales worldwide. However ABI Research’s current forecasts for 2010 are cautiously optimistic – if by optimism you mean that we may see shipment numbers stabilize and maintain an essentially flat growth rate rather than falling further.

“ABI Research estimates that worldwide handset shipments will fall by at least 8% in 2009,” says practice director Kevin Burden, “and we believe that flat growth in 2010 is the best the market will deliver. We will see neither significant growth nor decline in shipments, and that would actually be a good outcome: the beginning of the upswing back to a more stable growth pattern.”

Even if global shipment numbers hold steady at essentially 2009 levels, there will be regional variations. Some regions such as the Middle East and Africa will fare comparatively better, but volumes there are quite low.

The Asia-Pacific region will suffer most in 2009, primarily as a result of its huge volume of shipments – roughly triple the next largest region. And stabilization – if it comes – will arrive there a little later than in North America and Europe, resulting in a 2010 forecast that still shows a minimal decline in shipments, while other regions may enjoy a minimal positive growth.

“There are telltale signs that at least some parts of the handset ecosystem may be starting to steady,” Burden adds. “Many handset vendors are replacing component inventories after reducing them to very low levels in recent months to keep from overextending as the market dropped. This doesn’t necessarily mean the whole market is doing better, but it is good news at least for the component suppliers, some of which were really suffering.” [ABI Research]

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