iSuppli says economic crisis causing mobile-device shipment contraction

December 4, 2008--According to display market research firm iSuppli (El Segundo, CA), the once almost unstoppable growth in mobile-device shipments and revenues is coming to a screeching halt as wireless subscribers around the globe extend the life cycles of their existing devices in response to difficult economic conditions. iSuppli says that in Q3 2008, the mobile-device market ended with 316.7 million units, down 1.1% from 320.4 in Q2.

Manufacturers are being conservative in their sourcing and component procurement activities and they are making efforts to reduce inventory to maintain lean and efficient operations; as a result, iSuppli has lowered its forecast of global mobile-device shipment growth to 8.9% in 2008, down from 10.4%, which will end the year at 1.287 billion units. Shipments in 2009 are expected to decline by 5.6% to 1.215 billion units.

With the penetration of mobile handsets in emerging markets rising rapidly during the past few years, upgrades have grown to account for more than 50% of total mobile-device shipments in 2008. Because of this, mobile-device shipment growth has become more sensitive to the upgrade cycle.

Based on iSuppli's preliminary estimate, on top of the average selling price (ASP) erosion and higher mix of entry-level handsets in mobile devices, it is likely industry revenue will suffer a 10.7% decline in 2009.

For more information, go to www.isuppli.com.

--Posted by Gail Overton