Economic Crisis Likely to Impact High-flying Cellphone Industry

While the cellphone industry has generally been unaffected by economic ups and downs, this recession may well be very different, reports In-Stat. The current economic slowdown is more widespread and deeper than ever experienced during the history of the cellphone, and has spread through Europe, Asia and North America, the high-tech market research firm says. The industry is currently strong, and this year is turning out to be a relatively good one, but the cellphone industry will likely have some bumps and turbulence over the next couple of years.

“The economic crisis is still playing out, but all indications are that it will have an effect on the cellphone business worldwide, but mostly on North America and Europe,” says Allen Nogee, In-Stat analyst. “In-Stat believes that it will take until 2010 before cellphone sales return to their normal growth levels.”

Recent research by In-Stat found the following:

• For the next five years, cellphone semiconductor rev-enue will only grow at a 3.3 percent compound annual growth rate (CAGR).
• Over 1.2 billion cellphones will be shipped this year, but the growth rate is rapidly slowing.
• The cellphone industry will be tested like never before in the next year, as it deals with the impact of a poor economy and a lack of new features to promote.