Are smartphones recession proof?

Smartphone sales up in 2008 - guess who's responsible?
Smartphone sales up in 2008 - guess who's responsible?

New research suggest that smartphones will buck the economic downturn, with increased sales and higher demand for data in Europe, even as traditional phone sales falter.

Market research company IDC found that while overall phone sales in 2008 (a total of 1.18 billion worldwide) were just 3.5 per cent higher than 2007, converged devices and smartphones enjoyed 25 per cent growth in Europe - and the numbers were higher still in America.

ABI Research predicts that in Europe, we will continue to buy phones and contracts even during a recession.

Another 14 per cent of a phone each

It estimates that the penetration rate for mobile services will rise from today's 121 per cent to 135 per cent by 2012 - that's an average of 1.35 mobile contracts for every single person on the continent.

ABI estimates that even with more phones out there, we'll spend less on them, except data, which will show 4 per cent annual growth.

ABI practice director Dan Shey, "Data services are providing the revenue uplift driven by the uptake of smartphones, and adoption and usage of mobile e-mail and Internet services."

IDC senior research analyst Ryan Reith agrees, "Smartphones are unique and unlike the rest of the market. Data attachment rates for these devices is well beyond that of traditional mobile phones, and the devices and services catering to this segment were more readily available than ever before in 2008."

"As long as operators are able to continue to subsidize these devices, and developers continue to enhance applications, then this segment will be a silver lining to an otherwise gloomy market."

Mark Harris is Senior Research Director at Gartner.