Recession - decline of the mobile phone

Mobile phone sales drop nearly 5% in Q4, but are up overall in 2008

Mobile phone sales for 2008 showed 6% growth globally, although the economic downturn led to a 4.6% decline in the fourth quarter, research firm Gartner Inc. said today.

All of the top five mobile phone vendors experienced a decline in sales in the fourth quarter, Gartner reported.

For all of 2008, 1.22 billion mobile phones were sold, a 6% increase over 2007. But in the fourth quarter alone, 314.7 million mobile phones were sold, a drop of 4.6%.

Carolina Milanesi, a Gartner analyst, said retailers and carriers saw lower consumer interest in buying mobile phones in the fourth quarter, sparking special sales offers that helped reduce their inventory levels by a record ratio. Those efforts to reduce inventory are expected to gain momentum in the first quarter of 2009 and continue into the second quarter.

Once inventories reach a low point midyear, retailers will begin restocking phones in greater numbers, but Milanesi said that will not mark the beginning of a market recovery. She predicted a mobile phone sales recovery won't hit globally until 2010.

Nokia led in the fourth quarter with sales of 118.8 million phones. Samsung finished second with 57.5 million, while LG Electronics was third with 28.1 million. Sony Ericsson was fourth with 23.5 million and Motorola was fifth with 21.7 million. All others accounted for 65 million.

For all of 2008, Nokia led with 472.3 million mobile phone sales, or nearly 38% of the market. Samsung finished second with 199.1 million, or 16.3% of the market. Motorola was third with 106.5 million, an 8.7% share. LG was fourth with 102.5 million, an 8.4% share. Sony Ericsson was fifth with 93.4 million, a 7.6% share. All other vendors sold 248 million or 20% of the market.