Mobile phone market making a turnaround

The mobile phone market is slowly rebounding from more than one year of struggling sales, with global handset shipments growing almost 5 percent in Q2, according to iSuppli researchers.

During Q2, mobile phone shipments increased 4.7 percent up to 265 million phone units when compared to Q1, as demand in the Middle East and Latin America increased.  Although the numbers look promising, it’s still a difficult time for the industry, as shipments are still down 15.1 percent from the same time period one year ago.

iSuppli predicts 2009 overall shipments will continue to falter 9.9 percent when looking at year-to-year numbers, marking the first annual shipment decline of mobile phones since 2001.

Handset manufacturers are selling a growing number of smartphones, but have struggled to sell regular handsets to consumers.

Companies such as Motorola, Sony Ericsson, and others who don’t have a diverse offering of smartphones have struggled even more than other manufacturers.  Research In Motion (RIM) and Apple, which have the BlackBerry line of smartphones and iPhone, however, have bucked the trend and continue to see high-demand for their devices.  Samsung also was able to endure the turbulent times, as the company increased its shipments up to 52.3 million units, in thanks to bolstering its lineup of touch screens and smartphones.

If companies are unable to compete in the smartphone market, then they must focus on the low-cost mobile phone market designed for emerging markets.  Despite generating less revenue for each product shipped, there is a large demand for technology in South America, Africa, and Middle East.

I expect the industry to make a turnaround slowly but surely, especially as the global economy continues to rebuild itself.  Motorola, Nokia and others continue to work on smartphone devices — a very wise choice — and it will be interesting to see what they’re able to do in the future.  Companies are expected to continue focus on smartphoes and the low-end market, with a lack of focus on midrange handsets.