Mobile Phone Markets Bounce Back from 2009 Decline

Over the last two years, themobile phone handset market has seen decline

. However, market research group GfK announced this week that the market has finally bounced back with three consecutive months of annual growth.

Through April, May and June approximately 7.1 million handsets were sold, an increase of 5.15% as compared to the same period last year. June in particular showed strongly with sales up 6.8% compared to June 2009. This could reflect the strong uptake of the iPhone 4. Launched June 24th, sales of Apple's flagship mobile phone smashed forecasts, making it the most successful device in Apple's history.

The turnaround is a triumph for the telecoms industry after the painful market fall in 2009, caused by the decline in the pre-pay market.

This year's turnaround has been driven by the continuing success of the contract market that remained fairly resilient last year in spite of overall contraction. GfL noted that the contract market only declined twice last year "due to the continued demand for smartphones".

Ben Mansell, analyst at GfK said: "Throughout the last two years, prepay phones have seen a decline in sales as the demand for high-end prepay phones slows down.

"This is due to a variety of reasons, not least the recession customers are less keen to replace their handsets as frequently as in the past.

"However, contract phones have seen near constant growth new 24 month contracts offer better value for money and demand for high-end smartphones sees no sign of slowing down."

The latest figures for the second quarter of 2010 indicate the pre-pay market has caught up again with the pay monthly contract market which only saw a single period of growth during the previous 12 months. This was facilitated by promotions on key phone handsets.

However the growth should be treated with caution. GfK cautioned that the pay as you go market could falter if promotional activities halt. The next quarter may also see a decline "as the 6 month gap between the end of the last 18 month tariffs sold and the first 24-month tariffs begins".

Mobile Phone Markets Bounce Back from 2009 Decline

By: Pandora Devine

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