Cheap smartphones prove recession-proof: IDC

Adoption of mid-range smartphones is set to buck the trend of falling revenue in the mobile market this year.

According to IDC’s Quarterly Mobile Phone Tracker for Q4 2008, the number of mobile phones shipped fell by 16 per cent to 2.98 million units in 2008. It claimed the number of converged devices (smartphones) shipped increased by 8 per cent and will rise by a further 8 per cent this year due to adoption of midrange priced devices.

IDC telecommunications market analyst, Mark Novosel, said the decline was due largely to customer migration to Telstra’s Next G network.

"The majority of the year-on-year decline in 2008 was due to the unsustainable boom caused by Telstra's CDMA to Next G migration in 2007,” Novosel said in a statement. “The actual effect of the slowing economy is less significant at this stage.

“Converged devices available [for] $49 per month should do well in 2009. It's difficult to imagine anyone giving up their mobile phone despite growing negativity in the economy, however, it is likely some consumers on higher plans will start cutting back on their mobile spend when it's time to renew their contract,” he said.

The IDC report claimed the recession has pushed up prices for mobile phones, and claimed adoption of high-end smartphones will drop this year. The researcher said last year shipments of iPhones dropped 27 per cent quarter-on-quarter, and unit costs are decreasing in the lead up to product upgrades.

Shipments of mobiles built on HSDPA (High-Speed Downlink Packet Access) constituted 45 per cent of the mobile market in 2008, according to IDC, and will increase by 4 per cent this year.