Phone forecast calls for sales decline in 2009

Nov 25, 2008

By Scott Moritz

With clouds of economic gloom darkening the tech horizon, mobile phone sales - a former bright spot in the gadget world - look to be slowing.

Tech buyers went away early this fall, and as recession fears intensified, orders have continued to dry up.

There have been a number of ominous signs. First Cisco (csco) slashed its outlook and froze hiring. Then Wall Street analysts slashed Google's (goog) search ad sales estimates, predicting the first ever drop off in the company's growth rate.

Now, market analysts at Gartner have peered ahead into future and declared cell phone sales will likely slow from 2008 levels by 1% to 4%. This would be the first year-over-year slowdown since 2001.

"It is too early to say how long the economic climate will impact the devices market, but we expect market conditions to remain challenging through at least the first half of 2009," Gartner analyst Carolina Milanesi said in a statement Tuesday.

A low single digit drop in sales certainly isn't a steep fall and hardly a surprise in light of recent downward adjustments from wireless phone giants Nokia (nok) and Samsung. But no growth in 2009 would be a major milepost given how newer markets like Brazil, Russia and Asia have been providing plenty of worldwide demand. And in mature markets like Europe and the U.S., smartphone sales are surging, fueled by touchscreens like Apple's iPhone and Research in Motion's new BlackBerry Storm.

Gartner now predicts mobile phone sales will hit a growth rate of 8% this year, down from the 15% level in 2007.

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