Wireless Handset Shipments Dropping, But How Far?Wireless Handset Shipments Dropping, But How Far?

There's general agreement among the mobile phone players and prognosticators that handset shipments will fall this year, but there's disagreement about the degree of the drop.

Nokia is a relative optimist, predicting this week that handset shipments will drop about 10%, while market research firm In-Stat thinks the number will more likely be more than 20%.

Taking heart in the fact that inventories have been dropping, thereby helping clear the way for a recovery, Nokia is optimistic that the worst is over. It's expecting sales to level off during the first half of 2009.

"The market is no longer falling in an uncontrolled manner," said Olli-Pekka Kallasvuo, Nokia's chief executive, in a conference call Thursday. "I'm encouraged by the signs of stabilization seen at the end of the first quarter."

But In-Stat looks at the handset market and sees mostly gloom and doom It's forecasting a 20.5% plunge in 2009 handset shipments compared with the previous year's numbers. Citing the poor worldwide economy as the chief culprit, the market research firm's analyst Allen Nogee said: "People that are unemployed are less likely to replace their cell phones, and businesses will not pay for cell phone subscriptions for employees they've let go."

Less gloomy, though, is Nogee's finding that subscription growth will fall at a lesser rate than handset sales; he predicts that subscription growth will drop by 8.9% in 2009 and by 6.3% in 2010. In-Stat believes there won't be a recovery until 2011, when it foresees shipments finally growing at a 9.6% rate. The market research firm is predicting that SC-SCDMA subscriptions will jump by a tenfold factor between 2009 and 2013.

In its first-quarter financial report this week, Nokia said it held onto its 37% worldwide market share of 37%. Better news for Nokia was that its share of the hot smartphone market jumped from 32% to 38%.

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