Analysts following the mobile industry expect a pricing battle to begin as manufacturers deal with four straight quarters of declining handset sales.
Despite smartphone sales increasing as wireless providers offer additional texting and data plans, total sales of regular handsets have struggled.
Analysts believe the handset industry could recover as much as 3% during Q4, though there is concern the recovering industry could lead to deep price discounts for consumers. Price cuts are obviously excellent for consumers, but they tend to severely eat into the bottom line for manufacturers.
Nokia, the No. 1 handset maker, anticipates a decline leading into the fourth quarter, with research group IDC projecting the industry lowering 6% year-on-year.
Samsung and LG Electronics, which sit in the No. 2 and No. 3 positions respectively, gained marketshare that Nokia lost. Samsung now controls 20.7% of total handset sales, while Nokia still holds on to 37% of the market.
Apple is still seeing high demand for its iPhone smartphone, which now has 2.5% of the overall handset market. The iPhone has shown significant growth in the market, especially against RIM BlackBerry smartphones. Subscribers are also leaving behind regular handsets to move to the more powerful, feature-rich smartphones.
I'm interested to see how low handset prices can go. Cheaper handsets will grow in emerging markets, but still should be able to find limited sales growth in the United States and Europe. Smartphones, except for premier units, also are lowering in price, offering wireless subscribers a variety of options to choose from.
As mentioned earlier, expect handset manufacturers to increase marketing basic handsets to emerging markets in South America, Africa and parts of Asia. Since many developing nations are just beginning to build up infrastructure for wireless support, it's an excellent time for manufacturers to tap into new revenue markets as the one in the United States slows down.
