Western Europe leads mobile device recovery

Grey matters

As recently as September market researcher Gartner had forecast a decline of 3.7 percent in worldwide mobile device sales for 2009. Now it thinks sales will only decline by 0.67 percent on 2008 and will grow by nine percent in 2010.

The two key drivers identified for this increased growth are a stronger than expected Western European market and an acceleration in the grey market - the import of cheaper devices from other regions, mainly China.

"Although the grey market or ‘white label' is not a new phenomenon and has been generated by Chinese device manufacturers who do not have a licence to sell and manufacture devices without a valid international mobile equipment identity (IMEI), today grey-market sales are no longer limited to China," said Carolina Milanesi, research director at Gartner.

"All manufacturers will have to compete with grey-market players as they expand into emerging markets in Asia/Pacific, Eastern Europe, the Middle East and Latin America and bring a lower weighted average selling price (ASP). The grey market will affect Nokia's market share the most."

Smartphones are predicted to account for a rapidly growing proportion of total sales, jumping 23.6 percent to 14 percent this year and are expected to account for 38 percent of the global total by 2013.

With a lot of the total growth expected to come from emerging markets, average selling prices are expected to fall and there will be greater emphasis on software, services and content as profit generators.

Table 1
Forecast: Mobile Terminal Sales to End Users, Worldwide, 2007-2011 (Thousands of Units)

Source: Gartner (December 2009)