The worldwide mobile phone market recorded another quarter of year-over-year decline in the second quarter of 2009 (2Q09). According to IDC's Worldwide Quarterly Mobile Phone Tracker, handset vendors shipped a total of 269.6 million units worldwide, down 10.8% from 302.2 million units in 2Q08. The second quarter results are an improvement from the 17.2% decrease seen during 1Q09, but ongoing challenges stemming from the economic crisis remain a factor to watch.
For the full year, IDC believes that the market will decline 13%, with the market outlook for 2009 remaining relatively consistent among the top vendors. The small signs of improvement were centered around consumer demand for high-end handsets and the manufacturers' ability to shift portfolio to meet these needs.
Regional Analysis
Amidst the ongoing economic challenges in North America, the market for converged mobile devices thrived with the arrival of the Palm Pre and the iPhone 3G S towards the end of the quarter. Shipment volumes for other converged mobile device vendors also benefited from increased attention and price adjustments on the segment, pushing the market even higher. At the same time, interest in prepaid devices remained strong for budget-conscious customers. Finally, the market for mid-tier and high-end devices began to show signs of improvement with the arrival of new devices from leading vendors.
Despite the expected decrease in volume from last year in Latin America, the second quarter of 2009 was stronger than expected, showing solid sequential growth from the doldrums that were seen in 1Q09. Local currencies in the key markets of Brazil and Mexico experienced revaluation from the precipitous drops that occurred in the prior six months, helping to alleviate some of the economic pain being felt by many businesses and consumers. Interest in 3G services and offerings have been expanding in the region, helping carriers to increase, or at a minimum sustain, ARPUs that have been falling over time.
Results in Western Europe continue to reflect weaker demand from the previous year despite some improvement from the first quarter. The growth of the very low-end segment was not sufficient to reverse the decline in traditional mobile phones. However, the robust growth of converged mobile devices was a sign that the recession may have reached the bottom and some improvements can be expected for second half of the year. In CEMA, the market showed more vitality after two quarters of abrupt decline, with regional shipments approximately 15% higher than in the previous three months. With handset distribution and sale largely out of mobile operator hands, the financial crisis had squeezed inventory out of the channel as bank and trade credit dried up. The recovery of shipments in the second quarter suggests that this process has now been largely completed and that underlying demand remains robust.
High levels of private savings and aggressive national fiscal policies have helped sustain the demand for consumer products in Asia/Pacific, even as the global economy sputters along. Now, with several Asian economies showing the green shoots of recovery, mobile phone demand has also responded in a healthy fashion, with shipments for the region once again surpassing 100 million units in 2Q09.
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