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March 26, 2009

In a Tough Year iPhone Shines

By Gary Kim, Contributing Editor


No matter who you ask, the assessment is the same: 2009 will be a bad year for cellular handset sales worldwide. However, ABI Research’s current forecasts for 2010 are cautiously optimistic, “if by optimism you mean that we may see shipment numbers stabilize and maintain an essentially flat growth rate rather than falling further,” ABI Research analysts note.
 
“ABI Research estimates that worldwide handset shipments will fall by at least eight percent in 2009,” says ABI Research practice director Kevin Burden. “And we believe that flat growth in 2010 is the best the market will deliver.”
 
“We will see neither significant growth nor decline in shipments, and that would actually be a good outcome: the beginning of the upswing back to a more stable growth pattern,” says Burden.
 
Even if global shipment numbers hold steady at essentially 2009 levels, there will be regional variations. Some regions such as the Middle East and Africa will fare comparatively better, but volumes there are quite low. 
 
The Asia-Pacific region will suffer most in 2009, primarily as a result of its huge volume of shipments – roughly triple the next largest region. And stabilization – if it comes – will arrive there a little later than in North America and Europe, resulting in a 2010 forecast that still shows a minimal decline in shipments, while other regions may enjoy a minimal positive growth.
 
“There are telltale signs that at least some parts of the handset ecosystem may be starting to steady,” Burden says. “Many handset vendors are replacing component inventories after reducing them to very low levels in recent months to keep from overextending as the market dropped. This doesn’t necessarily mean the whole market is doing better, but it is good news at least for the component suppliers, some of which were really suffering.”
 
Separately, data from AdMob suggests that the Apple iPhone (News - Alert) continues to get a disproportionate share of whatever sales are occurring.  The iPhone now accounts for 50 percent of mobile Web traffic from smart phones in the United States, according to AdMob (News - Alert).  
 
Over the past six months, the iPhone has taken share from Blackberry and Windows Mobile, sayas AdMob. In August 2008, the iPhone made up only 10 percent of mobile Web traffic from smart phones. During the same time, Blackberry’s share has gone from 32 percent to 21 percent (with the Curve and the Pearl coming in stronger than the Storm), while Windows Mobile has taken an even bigger hit, declining from 30 percent to 13 percent. Palm is also down to 7 percent from 19 percent six months ago.
 
The only other smartphone operating system that is showing gains in mobile Web usage is Android (News - Alert), which has captured a five percent share just three months after launch. And that is up from three percent as recently as January. The gains shown by the iPhone and Android show what is possible when phones are built with fully capable browsers and support a rich array of Web apps, AdMob suggests.
 
On a worldwide basis, smart phones running on the Symbian (News - Alert) operating system, mostly from Nokia, still dominate mobile Web traffic with a 43 percent share. But that is down from 64 percent in August. The iPhone has gone from four percent to 33 percent of mobile Web traffic on a worldwide basis. All the other mobile operating systems are down.

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.

Edited by Jessica Kostek




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