Handset Market Goes From Bad to Better

[qi:gigaom_icon_mobile] The global market for handsets in 2009 will shrink 7.5 percent from the prior year, according to a blog post written today by ABI Research. That compares with a prior contraction forecast of 8.1 percent. The firm revised its global handset sales outlook following a better-than-anticipated first half of the year.

And while ABI analyst Kevin Burden expects industry consolidation driven by vendors’ need to support more hardware platforms, operating systems and applications, as well as an overall pressure on profits, he doesn’t see that consolidation taking place until 2010 and beyond. From the post:

The pressures for consolidation may not necessarily come from tightening shipment volumes but also from greater integration of hardware, OS and applications development. ASPs [average selling prices] for smartphones are higher than the overall average, and have supported R&D to date; but in such a competitive environment, the R&D pricetag can only go up.

Apple and Research in Motion take in 31 percent and 35 percent of the mobile phone industry’s profits respectively. So the pressure on middle-tier providers such as Nokia or Motorola, which are seeing the profits on their phones fall, will force them to consolidate. The only question is, who will be a buyer and who will be a seller?

loading

Comments have been disabled for this post