Global Mobile Phone Shipments Slow, Economy the Reason?

The worldwide mobile phone market is forecast to grow slightly more than four percent year over year in 2012, the lowest annual growth rate since 2009, due to a sharp decline in the feature phone market and sluggish global economy.


According to IDC, vendors will ship a total of nearly 1.8 billion mobile phones this year, compared to 1.7 billion units shipped in 2011. By the end of 2016, IDC forecasts 2.3 billion mobile phones will be shipped to the channel.


The slow growth in the overall mobile phone market is primarily due to the projected 10 percent decline in feature phone shipments this year. Many owners of feature phones are holding on to their phones in light of uncertain job and economic prospects.


That is not to say consumer behavior always is a leading indicator. Often, consumer behavior is a lagging indicator. In this case, the lower demand for feature phones probably is more a response to declining economic growth.


Since the global recession ended in 2009, the world economy has been fueled powered by rising powers in the developing world led by China, India and Brazil.Now, all three are running into trouble. But Europe's obvious slowdown, threatening to become a renewed official recession, also is matched by similar concerns about the U.S. economy.