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Last updated: Tuesday, November 11, 2008

A wave of economic gloom is expected to hit mobile phone buyers next year, and more and more analysts predict the once-buoyant market will shrink for the first time since the 2001 crash, a Reuters poll shows. On average, analysts expect global growth to be 3 percent in both the fourth quarter and in 2009, compared with well above 10 percent in recent years. Eight out of 22 analysts said they expected the market to contract next year. In a similar poll just a month ago, only one analyst out of 23 expected 2009 market sales volumes to fall, and then only slightly. For the fourth quarter, analysts expect the market to grow 11.6 percent from the third quarter, less than the 13.5 percent estimated by Nokia, the world’s largest cell phone maker. The fourth quarter has traditionally been a bonanza for cell phone makers as consumers snap up phones for holiday gifts. The $190 billion cell phone market, which was born in the 1980s and became a major growth industry after a surge in the late 1990s, had a brief shock in 2001, when the market fell for the only time. Cell phone makers have prepared themselves for the market slowdown over the past several months, avoiding the build-up of large inventories that hurt the market in 2001. Also, some distributors have been held back from building up phone inventories because of the credit crisis, analysts said. The first indications of future demand, however, are not promising. Qualcomm, which makes chips for wireless devices, issued a disappointing profit outlook for the current quarter and year ahead Thursday, indicating that the economic crisis could have a prolonged effect on cell phone demand. Paul Jacobs, the company chief executive, said the credit crisis and economic uncertainty meant sales of wireless gadgets would probably be slower in 2009 than…

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Analysts Expect Market for Cell Phones To Weaken

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