The worldwide mobile phone shipments dropped by 15.8 percent year-on-year to 244.8 million in the first quarter of this year, as expected, according to IDC. The first quarter of a new year is typically characterized by seasonally lower shipment volumes following a busy holiday quarter with channels clearing out excess inventory. But the decline in Q1 2009 was especially sharp due to weak end-user demand, currency volatility, and lack of credit for merchants as consumers and the supply chain adapt to the recession. At the same time smartphone shipments grew 4 percent year-on-year, driven by growth in Western Europe, North America, and Asia/Pacific (excluding Japan). Nokia saw its shipment volumes dip below the 100 million unit mark for the first time in two years, while its ASP slid due to pricing pressure and greater emphasis on lower-priced devices. Total shipments amounted to 93.2 million, 19.3 percent less than in Q1 2008 and Nokia’s market share dropped by 1.6 percent to 38.1 percent. Samsung saw its shipments drop by 0.9 percent to 45.9 million good for a 18.8 percent market share, while LG Electronics shipped 22.6 million handsets during the quarter, 7.4 percent less than in Q1 2008. Motorola reports the largest drop in quarterly shipments of the top five manufacturers with 46.4 percent to 14.7 million and Sony Ericsson saw its shipments drop by 35 percent to 14.5 million.
Shipments of mobile phones into North America started the year slightly higher than the same quarter a year ago even as the economic recession bit deeper into the US and started to impact Canada. Carriers' efforts to lure customers with unlimited plans and free device promotions helped offset a sharper decline, even in the face of slower subscriber growth. As expected, the Latin American mobile phone markets took a negative turn as most of the economies in the region began to see slower economic growth. In addition, local currency devaluation drove prices higher on imported phones, reducing demand. Much of the Western European handset market was characterized by weaker consumer confidence and lower demand, while channels, already holding low inventory, were reluctant to re-stock. This set up challenging conditions for vendors in both the traditional mobile phone and converged mobile device spaces. Meanwhile, the CEMA market posted some positive news, as much of the inventory was cleared at the end of 2008. Shipments into the Middle East and Africa contracted at a slower pace in Q1, while demand in Central and Eastern Europe and Russia decreased rapidly due to currency devaluation.