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12/15/2009
07:18 PM
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Mobile Handset Sales Forecast Improves For 2009

Gartner attributes the bump to sales in Western Europe and on the gray market and says sales will finish flat year-over-year.

Market researcher Gartner on Tuesday raised its 2009 global forecast for mobile handset sales, due in part to stronger-than-expected sales in Western Europe.

Also contributing to the revised forecast is the acceleration in grey market sales. While legal, such non-branded sales are often unauthorized by the original manufacturer.

Gartner said the combination of led to it raising its 2009 sales forecast to flat with 2008. Gartner in September had predicted a 3.7% decline. The researcher believes handset manufacturers will ship 1.2 billion units this year.

The rising number of grey-market players in Asia/Pacific, Eastern Europe, the Middle East and Latin America are boosting shipments, but lowering average selling prices, Gartner said. The phenomenon will affect Nokia's market share the most. Nokia, the world's larges handset maker, is a major player in the low-end of the global market.

The economic downturn in 2009 forced people to delay replacing older handsets. However, Gartner expects replacement cycles to return to normal within two years, driven by falling smartphone prices and shorter contracts. Indeed, prices will likely fall 3% next year.

Smartphone shipments will represent 14% of total mobile device sales in 2009, an increase of 23.6% from 2008, according to Gartner. By 2013, smartphones will likely account for 38% of shipments.

While Gartner expects the overall handset market to return to growth next year, the researcher warns that the times of 20% increases are over. The reason is growth shifting from the now-saturated mature markets to emerging markets.

"Pressure will remain for manufacturers to sustain and grow margins as ASP (average selling price) continues to decline," Gartner researcher Carolina Milanesi said in a statement. "Software, services and content will be much bigger drivers than hardware, pushing traditional mobile phone vendors to reinvent themselves to remain at the top of their game."

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