Analysts at odds over mobile phone sales

Did mobile phone sales start to tank a lot from July to September, or not? Analysts voice some disagreement over recent sales statistics and how those numbers should be interpreted.

Mobile phone shipments rose 3.2% in the third quarter of 2008, according to a year-to-year comparison from IDC. Another analyst group, ABI Research, put that number at 8.2%. In new reports, however, both analyst firms found smartphones to be a bright spot from July through September, and both predicted that the current economic crisis will cast a shadow on holiday sales.

Although 3.2% is an improvement, the third quarter is historically a ramp-up time as manufacturers ship phones in preparation for the holiday season, "producing year-over-year growth rates as high as 20%," according to an IDC statement.

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"Handset vendors felt the pressures of the dismal economy in the third quarter of 2008, and as a result, shipments and revenues were down almost across the board," acknowledged Ryan Reith, senior research analyst with IDC's Quarterly Mobile Phone Tracker.

On the other hand, Jake Saunders, ABI's Asia-Pacific vice president, viewed the 8.2% sales figure determined by his company in a quite optimistic light. "Given the traumatic news ricocheting around the financial markets, one would almost expect mobile handset markets to have nosedived. However 3Q-2008 still delivered 8.2% annual growth," according to the ABI analyst.

IDC's Reith did see a couple of "signs of hope": Apple's successful third quarter and Nokia's "positive outlook for 2008 despite a tough third quarter."

Ramon T. Llamas, another senior research analyst at IDC, affirmed that, also during the quarter, "the market for converged devices (formerly known as smartphones) posted strong gains."

Concurred ABI's Saunders, with even more optimism, "Smartphones are truly capturing the imagination of the buying public, [and this is] benefiting vendors [that offer] highly desirable smartphones."

Still, ABI announced that it has now revised its fourth quarter growth expectations downward to 7.5% from a previous level of 10.4%.

"Looking forward to the holiday season, mobile phone average selling prices have already begun to drop and marketing campaigns are ramping up. [Competition] for buyers will remain high as spending will be a concern to consumers. IDC expects tight economic conditions will make 2009 slower and more competitive as well," according to IDC.

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