Mobile Phone Sales to Decline Over Next 5 Years

Mobile phone sales are going to decline sharply over the next five years, to the tune of 1.04 billion devices, according to Informa Telecoms & Media. In its new report, “The Financial Crisis: Analyzing the impact on global mobile markets,” the research firm has revised its forecast for device sales over the next five years down by 14 percent.

Some 6.39 billion devices are forecast to purchased between now and 2013, Informa said, vs. its previous expectation that 7.43 billion devices would be bought. For 2009, Informa revised its forecast for the number of mobiles phones that will be purchased down to 1.12 billion devices from 1.32 billion. This is a brutal revision for a business that has always been about furious growth and razor-thin margins.

The downshift in overall device sales is one of the reasons why companies are shifting their attention away from low-cost devices to smartphones and an emerging category of devices I like to call superphones. Devices such as Apple’s iPhone sell fewer units but have higher profit margins. A recent surge in demand for RIM’s BlackBerry devices and more recently, HTC’s Android-based smartphones show that the incumbents such as Samsung, Nokia and LG are lagging in this higher end of the market. No wonder they’re redoubling their energies to focus on it, as evidenced by Nokia introducing a brand new line-up of its higher-end (and higher margin) N and E-Series of devices.

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