Worldwide mobile phone sales declined; India remains flat

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While the worldwide mobile sales witnessed 6.1% degrowth Q0Q in June 2009, the Indian handset market remains flat. The Indian handset market continues to show resilience to the recession though the growth is not as strong as it was earlier.

"The growth in Indian handset market is flat due to the economy downturn. However, it is still better than global trends," said Sunil Dutt, country head, Samsung.

Dutt pointed out that the Indian market still had demand as the penetration level was low and connectivity a need. Indian market has a demand for low-end devices, however mid-tier devices have seen a dip.

With the operators likely to continue to focus on the rural segment and the smartphone market is also witnessing an upswing, the handset market in the country is likely to show an upward trend. The replacement market is not showing the growth which it was earlier witnessing.

Worldwide mobile phone sales totaled just 286.1 mn units in the second quarter of 2009, a 6.1% decrease from the second quarter of 2008, according to Gartner.

Touchscreen and Qwerty devices remained a major driver for replacement sales and benefited manufacturers with strong, touch-focused mid-tier devices. However, the decline in average selling price (ASP) accelerated in the first half of the year and particularly affected manufacturers that focus on mid-tier and low-end devices, where margins were already slim.

The recession continued to suppress replacement sales in both mature and emerging markets. The distribution channel has dealt with lower demand and financial pressure by using up 13.9 mn units of existing stock before ordering more.

Gartner expects the gap between sell-in to the channel and sell-through to customers will reduce in the second half of 2009 as the channel starts to restock.

The Indian mobile handset market, despite sluggish sales seen towards the close of 2008, grew by 23.6% to 122 mn in CY 2008 up from 98.7 mn in CY 2007, according to Gartner. Of the 122 mn mobile handsets sold in 2008, 6-7 mn were smartphones. At the start of 2008, industry was expecting a higher mobile device sales in the order of 130-135 mn, but year ended with sales of 122 mn.

akhileshs@cybermedia.co.in