The global financial crisis sapped demand in the handset market during the first-quarter of this year, with shipments estimated to have fallen by up to almost 16 percent from the year earlier period. Research firm IDC said vendors shipped a total of 244.8 million units in 1Q09, approximately 15.8 percent lower than the 290.8 million units shipped during 1Q08. Meanwhile, Strategy Analytics calculates almost exactly the same number of phones were shipped in first-quarter this year (245 million), but said this is a 13 percent fall from 282 million units a year earlier. Strategy Analytics noted that “this was the fastest rate of annual decline in handset shipments since our records began.” Both firms cited the economic recession as responsible for amplifying the effects of a seasonally low quarter.
All of the top five handset vendors – Nokia, Samsung, LG Electronics, Motorola and Sony Ericsson – grew at negative rates during the first quarter, although South Korean vendors Samsung and LG managed to increase their market share. Samsung and LG were recorded as the second- and third-largest handset vendors, respectively, with 18.7 percent and 9.2 percent market shares. Nokia lost share slightly, to 38.1 percent, whilst Motorola was in fourth-place with 6 percent share and Sony Ericsson came in fifth with 5.9 percent. Despite the fall in total global units shipped, IDC noted that demand for smartphones continued to grow year-on-year at 4 percent. Looking ahead, Strategy Analytics forecasts 266 million units in 2Q09, for an annual decline of 10 percent. “We expect the remainder of the first half of 2009 to be volatile, as prevailing economic conditions continue to affect consumer spending behavior,” it noted in a statement. “Handset industry growth rates should improve gradually in the second half of 2009, as retailers rebuild their inventories with compelling new models and consumers slowly regain confidence in their financial position.”