Replacement Handset Market is Particularly Susceptible to Recession

The global recession will make the next two years unusually difficult for the cellphone industry, reports In-Stat. Subscription growth is slowing, so roughly three quarters of handset unit sales are expected to be replacement models, a discretionary purchase that can be delayed in times of economic hardship. The market's eventual recovery will be influenced by technical advances.

"Revenues will recover more rapidly than shipments due to sales of cellphones with new technology (LTE and TD-SCDMA) that command higher prices," says Allen Nogee, In-Stat analyst. "The increased penetration of higher-priced smartphones, particularly in the US, will speed revenue recovery as well."

Recent research by In-Stat found that global handset shipments will decline 20% in 2009, with Asia Pacific seeing the slowest handset shipment growth among geographic regions over the next 5 years.

The report noted though that LTE will drive $1.3 billion in North American handset revenue in 2013.

Posted to the site on 5th May 2009