9/15/2008 12:05:00 PM
Mobile sector beating gloomy forecasts
The mobile industry looks set to escape recession this year, with the number of handsets sold beating analysts’ forecasts and exceeding the total last year. The news comes as virtually all other areas of industry are suffering, with growth in MP3 players and plasma screen sales beginning to grind to a halt. It also follows major high street retailers revealing plummeting sales. Argos and John Lewis – considered among the most recession-proof retailers – last week announced their sales had fallen 6% and 30% respectively.
Leading research company GfK was predicting a 1% fall this year in the UK, but is now revising its forecasts sharply upwards. GfK now expects 9% growth to 34 million phones in the UK as flamboyant new handsets capture the public imagination and drive sales. Another encouraging trend is that prepay prices are expected to harden in the crucial Christmas period compared with 2007.
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Aaron Rattue, a senior analyst from GfK, said: ‘There will be more phones sold this year, compared to last year – even with Sim-only contracts and with some specialist retailers devoting a larger part of their floorspace and marketing budgets to selling other products, such as laptops. That has to be good news.’
Rattue said that Christmas deals were already being lined up, with signs that average selling prices could be higher than last year. ‘Christmas starts from October onwards, and activity is already underway. Last year there was a lot of activity around sub £30 handsets, this year there is a lot around the £50 to £100 mark.’
iPhone and BlackBerry devices appear to have stimulated interest in more capable devices, even in prepay. In the face of this, sales of Sim-only contracts, which were intended to deliver operators connections without the cost of supplying handsets, appear to have peaked, levelling out at around 100,000 per month.
However, while the mobile industry is still growing, the news is not all good. Non-specialists are beginning to edge out specialist mobile retailers from important prepay sales. And lucrative contract sales are moving away from high street retailers in favour of online. It is also not clear how much revenue operators are making on the back of growing handset sales.
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