Developing Continents Help Soften Mobile Sales Slowdown

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As the mobile phone market in Europe and North America slows down the slack is being picked up by Africa and Asia. Handset manufactures sold 238 million phones in the first quarter of this year, up 10% from a year ago, but down 15% from 2007’s fourth quarter. Fourth Quarter sales are usually up because of Christmas sales.

Texas Instruments, a large chip maker for the mobile industry, warned of a weaker demand for chips for high-end 3G phones, raising fears that the global economic slowdown is starting to cut into handset sales. In Europe, cell phone market growth slowed to 3% last year, according to Nokia. It looks as though economic fears are causing consumers to delay new upgrades.

“The macroeconomic situation is starting to have impact, but we saw this already before the credit crunch,” said CCS Insight analyst Geoff Blaber. “Most of those markets are heavily saturated.”

Overall global sales are expected to keep pace as developing countries continue to expand their mobile markets. Europe and North America are near the saturation point and experiencing economic slowdowns while countries in Africa and Asia are just beginning to build a cell phone infrastructure.

The emerging markets are less prone to want smartphones and other high-end handsets. This puts Nokia in a good position, as it has a large number of cheaper models to sell in developing nations.

“The volume in the high end of the market could be somewhat thinner, but this will not be dramatically visible in the overall market volume,” said Jari Honko, analyst with eQ Bank in Helsinki.

“On a global basis it should be a good, normal quarter,” said JP Morgan analyst Ehud Gelblum.

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