Handset sales expected to be flat in India in 09: Gartner

Written by Rachana Khanzode | Mumbai | Updated: Mar 5 2009, 05:22am hrs
Though the global economic downturn had a significant impact on the mobile phone industry globally, the India growth story has been intact in the year 2008, says Gartner. However, it expects the market to be flat in growth in the year ahead.

Anshul Gupta, principal analyst for Gartner, says, The total handset sales in India, in the calendar year 2008, was around 124 million from 98 million in the year 2007. However, we expect the sales in India, in the year 2009, to be almost flat. Volumes could be around 125 million units in the year 2009. This, according to Gupta, is going to be largely driven by weak market sentiments and a cautious approach by the consumer.

At the same time, consumers looking for high-end phones would largely look at value for money and need to use these features. The consumer sentiment for the high-end phones will be driven by need and not by desire to use features like Wi-Fi, 3G, 5 megapixel camera amongst others. It will be largely driven by ease of use and features of use.

The fourth quarter of 2008 saw a decline in the sales of the replacement segment, by at least 5%. The sales in the replacement category that contributed almost 45% to the total sales in 2007 saw a decline especially in the fourth quarter of 2008 and came down to 40% this year. Sales of mobile devices to first-time buyers continued to grow, with net-new mobile subscribers declining only marginally, from 81 million in the third quarter of 2008 to 79 million in the fourth quarter of 2008, says Gupta. However, the first-time buyers are not impacted with net collections up by 10 million handsets in the January 2009, he adds.

In its quarterly report, Gartner says that worldwide, mobile phone sales to end users totalled 314.7 million units in the fourth quarter of 2008, a 4.6% decline from the fourth quarter of 2007. Europe, the Middle East, and Africa (EMEA), declined 3.5% and Japan went down by 31.4% for the same period.

Sales in Western Europe reached 53.4 million units in the fourth quarter of 2008. Latin Americas handset sales grew sequentially by 9.9% in the fourth quarter of 2008, with nearly 37.4 million units sold during the quarter. Asia/Pacific, saw a decline sequentially by 8.4% at 107 million units.