Handset Market Decline May Soon Affect Carriers

cimg1027As people in the U.S continue to line up for mobile phone launches, the rest of the handset market is looking pretty grim. Optimistic news about the BlackBerry Storm is akin to Restylane in an aging actress — a plastic filler that hides signs of decay underneath. Today Samsung said that the handset market won’t achieve the 9 percent growth it anticipated for 2008 back in June, and pointed to a lackluster 2009. James Chung, a spokesman for Samsung, told Reuters the electronics giant was looking at single-digit or (the mathematically impossible) “negative growth” for next year.
This follows Nokia’s grim update earlier this month in which the world’s No. 1 handset maker predicted a sales slowdown. As we’ve already noted, lowered handset sales hurt chipmakers and handset makers, and may eventually hurt carriers, which use new handsets to encourage consumers to buy new, or more inclusive, data plans.
Wireless data plans are still enjoying a steady takeup rate as people purchase sub-$200 smartphones. But even though people may still buy those smartphones as Christmas gifts, my bet is that data subscriptions will also hit bumps if the economy continues to pummel consumers. I fired off a quick email to Chetan Sharma to find out how he thought the lowered handset forecast might affect carriers and their efforts to push data plans; he said we won’t know for sure until next year.

“Now, we don’t know if these trends will counter each other to balance things out or will the replacement cycles slow down quicker to bring down the services market. Q3 data didn’t have any indication of that and I doubt if Q4 data will have any conclusive evidence of the trend. I think the first indication of things are shaping up will be in Q109 results as by then consumers and the markets will have a better understanding of the new economic policies.”

March is a long time to wait, but I’m curious how the economic slowdown will affect your data subscriptions. Will you pare back?