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My Profile Top News Reuters top ten news stories delivered to your inbox each day. Subscribe You are here: Home > News > Technology > Article Home Business & Finance News U.S. Politics International Technology Internet Entertainment Sports Lifestyle Oddly Enough Health Science Special Coverage Video Pictures Your View The Great Debate Blogs Weather Reader Feedback Do More With Reuters RSS Widgets Mobile Podcasts Newsletters Your View Make Reuters My Homepage Partner Services CareerBuilder Affiliate Network Professional Products Support (Customer Zone) Reuters Media Financial Products About Thomson Reuters Cell phone industry seen facing more trouble Wed May 20, 2009 11:28am EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Tarmo Virki, European technology correspondent PARIS (Reuters) - A recovery in cell phone demand will not happen until well into 2010, researcher Gartner said on Wednesday, while Reuters data showed the industry could suffer its worst quarter ever in April-June. The handset market fell 9.4 percent in the first quarter of 2009, Gartner said, adding it saw demand stabilizing but it would not be until next year before demand would grow again. "We do not expect demand to get better before second half of 2010," said Gartner analyst Carolina Milanesi. A Reuters poll of 34 analysts forecast handset vendor phone sales in the April-June quarter to slump 14.5 percent, with 2009 sales forecast to slide 10.3 percent. Several companies and analysts have said the worst could well be over for the industry after the first quarter drop, as the fall was partly caused by retailers selling stockpiles of older phones. In the first quarter, handset vendors sold 14.3 percent fewer phones than a year ago, according to research firm CCS Insight, with the world's top cell phone maker Nokia reporting its first-ever quarterly pretax loss. Gartner, which tracks changes in inventory and actual sales to consumers, said retailers sold some 25 million phones from inventories in the first quarter. It said it expects inventory reduction to continue in the second quarter, but at a pace of some of 10-12 million phones. "Although inventory has diminished there are still no clear signs of an improvement in consumer demand," said CCS Insight analyst Geoff Blaber. Global Crown analyst Tero Kuittinen said he expects phone sales in the second quarter to rise 5 percent from the first, but mostly due to the inventory change. "Trends in the key UK and Spanish markets remain worrisome; and consumer behavior across Europe continues shifting. People exiting 18- or 24-month plans drift toward prepaid phones or cheap monthly plans," Kuittinen said. SMARTPHONE BOOM TO EASE PAIN Gartner said 36.4 million smartphones were sold in the first quarter, up 12.7 percent from a year ago, and said it expects faster growth later in the year boosted by new and attractive models from many of the top vendors. Gartner's 27 percent growth forecast for the 2009 smartphone market is far ahead of many industry players, who forecast market to grow 10 to 20 percent this year. Aymar de Lencquesaing, the chief of Acer's phone unit, told Reuters Global Technology Summit he expected market growth in coming years to beat analysts' average expectations of around 15 percent as smartphone prices dropped. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Imax execs downplay importance of screen size Reuters Global Technology Summit Who will come out on top? Technology companies are drawing attention from investors and consumers alike as everyone tries to predict the market bottom and what new inventions might drive a recovery. Full Coverage More Technology News AT&T eyes cheaper plans for iPhone, other phones | Video Microsoft may unveil new search engine next week: report Imax execs downplay importance of screen size Sprint to sell Palm Pre for $200 after rebate | Video SanDisk CEO upbeat on 2009 More Technology News... Editor's Choice Slideshow A selection of our best photos from the past 24 hours. Slideshow Most Popular on Reuters Articles Video CORRECTED - UPDATE 1-GM bankruptcy plan eyes quick sale to gov't California budget ballot measures headed to defeat Iran tests missile as election race starts | Video "The Unit," "Earl," "Medium" get the ax Wary of U.S. debt, China shifts gears on investment Pattinson has "Breaking" news for "Twilight" fans Target ditches bull's-eye for "up and up" arrow Lambert and Allen to sing for "American Idol" crown | Video Terminated Chrysler dealerships to challenge sale Schoolboy Alfie not father of baby after all Most Popular Articles RSS Feed Video Netanyahu makes the rounds in DC Deadly Indonesia plane crash US pledges $110 mln for Pakistan Obama reins in vehicle emissions. Rebel leader death 'confirmed' Talk of the Town Two Americans killed in Afghan blast "University G8" clashes in Italy Painting relief for Haitians Sri Lanka claims war victory Most Popular Videos RSS Feed the great debate Facebook, shmacebook: What’s the next great thing? Facebook is the 800-pound gorilla in the social media space, with some 200 million members, a valuation of perhaps $5 billion and a base that has expanded well beyond its early roots as a private hangout for bored Ivy League students. Commentary We want to hear from you Join the Reuters Consumer Insight Panel and help us get to know you better Please take a moment to complete our survey Reuters.com: Help and Contact Us | Advertise With Us | Mobile | Newsletters | RSS | Interactive TV | Labs | Archive | Site Index | Video Index Thomson Reuters Corporate: Copyright | Disclaimer | Privacy | Professional Products | Professional Products Support | About Thomson Reuters | Careers International Editions: Africa | Arabic | Argentina | Brazil | Canada | China | France | Germany | India | Italy | Japan | Latin America | Mexico | Russia | Spain | United Kingdom | United States Thomson Reuters is the world's largest international multimedia news agency, providing investing news, world news, business news, technology news, headline news, small business news, news alerts, personal finance, stock market, and mutual funds information available on Reuters.com, video, mobile, and interactive television platforms. 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