Cellphones to be most resilient products in devices slump
Published: 7 January, 2009
Amid the bleak forecasts for consumer devices and their chips in 2009, handsets are at least bearing up better than 'less essential' products like media players. Users may buy cheaper smartphones or upgrade more slowly - or in many countries, look to carriers that offer 100% subsidies - but they will not stop depending on their handsets.
The latest set of gloomy predictions comes from Forrester Research, which says internet and mobile services will prove far more buoyant than video or games players, or satellite radio, during the recession. In north America, 51% of consumers said they would cut back on technology spending in 2009, a trend that is similar in Europe, though less marked in east Asia and emerging economies. In the US, the most hard hit products will be handheld game consoles, followed by satellite radios, high end smartphones, video game consoles and portable GPS devices.
While top end smartphones will be hit, with 62% of respondents saying they were less likely to buy one, and only 4% more likely, other mobile phones will hold up well. This contrasts with findings from European surveys, which see smartphones being the strongest part of the handset market, as users look to purchase one device for their communications, media and web needs, making other products like games players unnecessary. In north America, respondents were about equally split on whether they were less likely to purchase a mobile phone of any type, or whether their intentions were unchanged.
As for service providers, 83% of respondents have no plans to change their outlay on their ISP (and 2% will increase it), while 70% will keep their mobile service plan the same, and 2% expect to invest more. Premium cable and landline phone services are seen as less essential, and 14% may cancel or reduce these services.
On the chip side, wireless is also the most resilient area, with a survey from Forward Concepts reporting only a 3.4% drop in wireless infrastructure DSP sales between October and November 2008, amid a general "collapse" of DSPs in general, which fell by 33% in the same period (and in November, they fell by 49% compared to the same month in 2007). Despite the cellphone market squeeze, handset DSPs fell by a bearable 12% in October to November. The research firm forecasts that for the whole year, 2008 will have seen a 14% drop in shipments compared to 2007, but with most of the downturn coming in the last quarter of the year, boding ill for the current year.
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