After finishing 2008 by shipping more than 1.2 billion units, up 7.3% from last year, the global mobile phone industry will sell 2.2% fewer devices in 2009 but will rebound with 7.7% in 2010, IDC said today.

Particularly telling is the gap between smartphones and traditional phones. Smartphones grew 27% this year, now accounting for around 12% of all cell phones, while growth continues at a slower rate of 8.9% in 2009. Feature phones grew just 4.9% this year and that market will contract by 3.8% in 2009.

In the United States, the smartphone market grew a massive 75.7% in 2008, but will only grow 3.1% next year. IDC defines a smartphone as any handset on which users can install aftermarket applications.

Sales of feature phones – a large portion of which do have smartphone-like capability such as address books and Web browsers – contracted by 9.8% this year and will shrink another 11.6% next year. 

Announcements from component makers such as MediaTek, Qualcomm and Texas Instruments were an ominous sign, said senior analyst Ryan Reith, adding that markets are even shrinking for low-end phones in China and India. However, the market’s limited growth will mean lower prices for consumers, he added.

The market will see a limited rebound in 2010, Reith said.