The credit crunch will hit the huge sales of mobile phones this year according to both Deutsche Bank and Oppenheimer & Co, who have slashed their predictions on growth for year.

Although analysts are agreed that the phone industry's sales will increase, they now believe that it will be far slower than expected, with Deutsche Bank predicting a 6.1% increase to 1.22 billion phones in 2008.

This is some way short of their earlier prediction of 8.1% growth.

Food & shelter > new mobile

"We think consumers globally are stretching out their phone replacements, holding off on purchases to pay for gas or food or the mortgage," Brian Modoff and Jonathan Goldberg at Deutsche Bank wrote in a report.

"Conditions are just going to get tougher for the industry over the forthcoming year.''

The report – hardly the most upbeat for the industry – also contained the following nugget of optimism:

"Driving to work last week, we passed a warehouse on fire, sending up a thick plume of black smoke.

"The thought occurred to us that there has to be a better way to get rid of excess inventory, but judging from the state of the wireless handset industry, maybe there isn't."