The end of the party as a mobile phone

Almost all categories have seen sales dip sharply as the economy contracts. Globally, has been a sudden realization that "necessary" the purchase is actually "soft" purchases. The new computer, car, winter jacket all deferred.

Mobile phone sales were no exception. According To IDC:

Total sales of mobile phones in the fourth quarter was down approximately 12.6% compared with the fourth quarter of 2007. In the fourth quarter of 2008, delivered a total of 289.0 manufacturers million units, compared with 330.8 million units in the fourth quarter a year ago.

But for mobile phones, the real story seems to be much more bleak. Over owns half the world's 6 billion already a mobile phone. There are close to 4 billion mobile phones are already in use. This means that after years of double digit growth. the party is over.

iPhone and other smartphones still shows growth, even in this down economy. But they represent only a fraction of global mobile phone sales. Core handset growth will never return. Instead hope suppliers to demand for new services will increase each Subscriber's monthly invoice. See, for example, Mobile Banking, very strong growth. Wall Street Journal reported yesterday:

Bank of America says that users of its mobile banking service has almost doubled in the last six months or so, up from 1 million in June 2008 to 1.9 million today. Nationwide, the number of people who use online banking climbed from 400,000 in 2007 to 3.1 million at the end of 2008, according to ABI Research, a company that tracks technology trends.

Verizon Wireless reported last week that much of the growth in the fourth quarter came from data services. The average revenue per user for data services was 27.9 percent for the quarter, compared with the same quarter a year ago.

But with slow growth and huge capacity, should we really begin to see strong downward pressure on the rate plans. Particularly as the market looks more Android based phones that can run on any service and WiFi phones that can take advantage of a growing number of hotspots to acquire their data.

When my broker suggested that we invest in high yield bonds, from Verizon on the second day. I was less than enthusiastic. Unlike providers of cable, which seems to be able to continuously increase without giving increased value, vendors of wireless wake up to an increasingly competitive and transparent market. Awards and winnings can only go one way. And it is not up.

Jacob Brown principal in-depth research-a strategic market research companies. http://www.InDepthResearch.com