Cell phone industry declares end of recession

EL SEGUNDO, USA: The cell phone industry is proclaiming the end of the recession for the segment following an outstanding final quarter of 2009 and a projected substantial growth for smart phones in 2010, according to iSuppli Corp.

A resilient performer in an otherwise moribund world economy during the past year, cell phones ended 2009 with shipments of 1.15 billion units. While that number is down from the overall 2008 figure of 1.2 billion handsets, shipments in the fourth quarter of 2009 represented the culmination of an increasing growth pattern throughout all of last year.

Compared to third-quarter shipments of 290 million, about 335 million mobile handsets shipped in the fourth quarter, up 15.5 percent.

“Given the recovery of the market in the final quarter of 2009, and with Europe, Latin America and the Middle East/Africa regions doing exceptionally well during the period, the recession can be said to be officially over for the cell phone industry,” said Tina Teng, senior analyst for wireless systems at iSuppli. “The continued growth this year of total handsets—up a projected 11.3 percent to 1.3 billion units—further bolsters such a view.”

Among the various handset categories, smart phones—defined as handsets with a high-level operating system—are projected to expand 35.5 percent in 2010. Smart phone growth will be driven by a number of promising developments, including the introduction of entry-level smart phones, enthusiasm from vendors across the mobile phone and PC industries, the prevalence of 3G network deployments and the promotion of data-centric services in mature markets.

The figure shows iSuppli’s forecast for worldwide mobile handset shipments for the period of 2008 to 2014.Source: iSuppli, USA

With handset shipments in the fourth quarter of 2009 amounting to approximately 257.6 million units, the Top 5 players accounted for a whopping 77 percent share of the total handset market.

Nokia Corp. remained the leader of the handset market, shipping 126.9 million handsets during the period, giving it a 37.9 percent share of market. Runner-up Samsung Electronics Co. Ltd., which has introduced its own smart phone operating system, held the No. 2 spot with 20.6 percent share.

The remainder of the Top 5 is rounded out by LG Electronics, in third place with 10.1 percent share; Sony Ericsson in fourth, with 4.4 percent share; and Chinese giant ZTE, whose impressive 77 percent growth from the earlier quarter vaulted it into fifth place, with a 4 percent share.

A second Chinese handset manufacturer, Huawei Technologies Co. Ltd, landed in seventh place after also finishing an outstanding quarter with 82.4 percent growth.

Together, the two Chinese companies indicate the strong momentum occurring in the emerging market as well as an increasing presence in Europe on their part with key operators.

Source: iSuppli, USA