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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 Cellphone market growth raises pricing fears Fri Oct 30, 2009 1:36am EDT Email | Print | Share | Reprints | Single Page [-] Text [+] By Tarmo Virki, European technology correspondent HELSINKI (Reuters) - The global cellphone market is set to grow in the holiday sales-fueled October-to-December quarter, after four quarters of falls, raising fears of pricing battles, analysts said on Friday. The mobile phone industry is ending its worst year ever, with top handset vendor Nokia forecasting earlier this month that 2009 market volumes would fall 7 percent from 2008, indicating a small rise in the fourth quarter. "The industry is edging toward recovery," said Neil Mawston, analyst with research firm Strategy Analytics, while forecasting handset sales to grow 3 percent annually in the fourth quarter. He warned, however, that the global handset market was getting very crowded and oversupply and price cutting would be inevitable in 2010. Strategy Analytics estimated 291 million phones were sold in the third quarter, down 4 percent from a year ago. Separately, research firm IDC estimated the market dropped 6 percent year-on-year to 287 million phones in the third quarter. "During the third quarter, we saw a number of channels promoting older devices at significantly lower prices. For many, this was enough to spur demand and push volumes higher," said IDC analyst Ramon Llamas. Nokia cut phone prices across its portfolio in mid-October, with analysts saying the quarterly price cuts were spread quite evenly across the models at around 5 percent level. "Christmas looks to be highly promotional - price cuts in the U.K. market are already aggressive, particularly among cheaper touch-screen phones," said MKM Partners' analyst Tero Kuittinen. OVERSUPPLY IN 2010 Kuittinen said with all the vendors trying to push out new models the industry was facing oversupply in 2010, just like in 2001, but then oversupply coincided with a volume downturn. "In 2010, we are getting oversupply as the industry is emerging from a major volume decline. The danger here is that the cut-throat competition is going to blight the industry recovery," Kuittinen said. The world's second and third-largest handset vendors, Samsung Electronics and LG Electronics, continued to win more share of the market, with sales rising 16 percent and 37 percent, respectively. Both Korean firms reached their highest-ever share of the cellphone market, with Samsung controlling 20.7 percent of the market, but still clearly behind Nokia's 37 percent. "This was the first time a vendor other than Nokia has shipped more than one-fifth of the world's handsets since Motorola's RAZR-heyday performance of 2006," said Strategy Analytics' Mawston. Continued... View article on single page Share: Del.icio.us Digg Mixx Yahoo! Facebook LinkedIn Next Article: Crucial holiday season arrives for video game industry Also On Reuters Insider trading and suicide: A buddy story Video Video: From windmill to tap: Inventor makes water from air Slideshow Slideshow: Obama honors returning fallen soldiers More Technology News Google launches music search with Lala and iLike Horror video games scare up record sales RealNetworks back in the black, eyes Google tie-up Nintendo to launch larger-screen DS for $222 Gameworld: Horror video games scare up record sales More Technology News... 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