Will a sluggish economy mean slower mobile sales?

Analysts lower expectations for global handset sales for the coming year, citing consumer concerns about the economy as a deterrent to upgrading to new phones.

At least two analyst groups have cut their forecasts for global cell phone sales for the coming year due to consumer concerns about the economy.

Wireless market

UBS analyst Maynard Um told Reuters he's cutting his forecast for growth in the sector in half, from 6 percent down to 3 percent, with the North American and European markets being particular slow. JPMorgan analyst Ehud Gelblum cut his forecast as well, from 8.1 percent to 6.1 percent. He also cited Europe as being especially sluggish, and said he expects to see "more modest" growth in China, the report said.

Those figures aren't all that surprising when you consider that so much of the population in Europe and North America already have cell phones. Troubled times might lead some people to put off upgrading to a newer, shinier handset if they have one that already does the trick. But in a less-saturated market like China, people might be more likely to splurge on wireless technology.

A separate report might indirectly suggest those analysts are onto something. MetroPCS on Monday released their quarterly subscriber numbers, saying they've added 935,000 in the third quarter, 39 percent increase over the same period the previous year. Churn, which measures customer turnover rate, dropped 0.4 percent for the quarter. Those figures could indicate that Americans are looking to low-cost, flat-rate cell phone plans as a way to trim expenses.

But if consumer worries about the economy are affecting cell phone sales, the same might not be true for all consumer electronics. Sales of flat-panel TVs and game hardware during the upcoming holiday season should fare just fine, according to the Consumer Electronics Association .

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About the author

Jennifer Guevin is managing editor at CNET, overseeing the ever-helpful How To section, special packages, and front-page programming. As a writer, she gravitates toward science, quirky geek culture stories, robots, and food. In real life, she mostly just gravitates toward food.

 

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