Samsung Warns Cell Plunge

Samsung today warned that the cellphone market is likely to have slowed down in 2008 and to potentially shrink in 2009 due to the global recession. The Korean electronics giant had originally predicted that the total number of cellphones shipped in 2008 would grow by 9 percent but now says this is likely to be reduced given a sudden chilling effect from market conditions. This growth could slow further or even reverse in 2009, company representative James Chung says.

Such predictions echo rival phone producer Nokia's own predictions of a similarly tough economic situation that will force companies to compete for existing users rather than continuing to expand the market.

A sustained decrease is expected to have a ripple effect on pricing for the cellphones themselves by both shifting sales towards lower-priced phones, hurting bottom line income for some phone firms and forcing carriers to reduce the amount by which they discount some phones to remain profitable.

The cautious outlook from Samsung arrives just as research suggests Research in Motion is likely to face disappointing BlackBerry sales that may few new subscribers in spite of high-profile launches for the Storm and Bold.

By Electronista Staff