Analyst firm ABI Research predicts that market for handsets will return to growth and sales for the year should end up only 4 to 5 percent lower than in 2008.

 

“The outlook for mobile handset markets continue to improve,” said Jake Saunders, ABI Research’s (News - Alert) VP for forecasting. “While 3Q-2009 showed a YoY 6.5 percent contraction in shipments to 291.1 million, 2009 should close out with only a 4 to 5 percent contraction (to 1,138 million for the year).”

 

In Q3-2009, North America and Asia-Pacific helped to spearhead economic recovery. In North America, the avid enthusiasm for smartphones was the major driving force behind the growth, according to ABI. In Asia-Pacific, recovery in the local economies has been stoking interest in upgrades.

 

According to ABI Research, Finnish mobile giant Nokia saw its market share slip from 38.3 to 37.3 percent in the third fiscal quarter, while Samsung (News - Alert) continued to steam ahead, raising its market share to 20.7 percent.

 

Despite some very novel handset model introductions in Q2-2009, LG’s market share softened in Q3-2009 (10.9 percent), said the market watcher.

 

The global economic recession did have strong impact on the handset market. Almost all vendors either held their ground or lost a small amount of market share.

 

For America’s Apple (News - Alert), iPhone made a difference. “iPhone range of smartphones increased its market share from 1.9 percent to 2.5 percent,” Saunders said. “There have been arguments that Apple’s limited handset line-up will constrain growth, but for the mid-term, ABI Research does not expect any slowdown in Apple’s market-share growth.

ABI Research Practice Director Kevin Burden elaborated further.

 

“Despite the successes of the iPhone operating system, the leading player in the smartphone OS market is still very much Symbian (News - Alert) (48 percent), followed by Blackberry (18 percent),” said Burden. “The ‘dark horse’ in all this is Android.”

 

This week Motorola announced the launch of its navigation-friendly “Droid” handset. As the list of vendors committed to releasing Android (News - Alert) handsets expands, product momentum should translate into increased Android sales. ABI Research estimates Android could capture 10 percent of the smartphone market by 2014.

 

Smartphones are not the only handset segment to drive the market. GPS is also becoming a very desirable feature of handsets. By the end of 2009, ABI Research estimates 21 percent of all handsets shipped this year will have onboard GPS.