In-Stat says that while subscriptions will continue to grow, handset sales could drop by as much as 20 percent worldwide in 2009.
The report was timely as Nokia today reported a 90 percent drop in sales in the first quarter of 2009.
Allen Nogee, analyst at In-Stat, said he thinks Nokia’s disappointing results have a lot to do with its heavy presence in China. “Nokia doesn’t have a good presence in the U.S. but they have a big presence in China, which has been heavily hit by the recession,” he said.
Nogee cited consumers looking to avoid contracts during these uncertain times as one reason for the drop in handset shipments. “If you look at what makes up the total phone sales, there’s a third of the sales that are new customers, but then there’s the other two-thirds who are people replacing their phones. Right now, people don’t want to commit to a new contract and they’re more likely to stick with what they’ve got,” he said.
The report also shows a noticeable slowdown in subscription growth. After experiencing a 19.3 percent growth in subscriptions in 2008, subscription growth will fall by more than half, to 8.9 percent in 2009 and by 6.3 percent in 2010, the report states.
The report concludes that it will take until 2011 for shipments to regain robust growth, forecasting a 9.6 percent increase in handset shipments by that time.
A report from ABI Research released late last month forecasted a continued decline in handset shipments for 2009, with a best-case scenario of flat growth in 2010.