Wireless Informatics Forum

New stats from industry analyst Gartner show that handset sales in Western Europe have decreased for the first time since the analyst starting tracking shipment & sales figures in 2001.

Sales decreased 16.4 per cent year on year to 35.9 million in the first quarter of this year (2008). What’s the cause? Well, aside from the global credit crunch, consumers are simply hanging onto their phones for longer.

In W.Europe, operators have been pushing sales of higher end devices. These require hefty subsidies and longer contracts (most now run at 18-24 months). It’s a strategy that is helping operators to manage their subscriber acquisition costs (SAC), but for the OEM community there’s an immediate, and negative, impact on handset churn rates.

Many operators are also adopting new business models to protect profit margins, such as SIM-only offers which help to curb device subsidies and customer aquisition / retention costs. Telefonica O2’s SIM-only offer (Simplicity) now accounts for one third of all online sales and many consumers now seem prepared to keep their existing device in service that bit longer in return for a reduction in tarif.

Despite further slumps in Japan (where a technology plateau has hit handset sales) and a slow-down in North America, the global outlook remains promising with a 13.6% increase over the first quarter of 2007. This is thanks to the emerging markets – In the first quarter of 2008, 114.4 million mobile devices were sold in Asia alone.