Sales of cell phones in the U.S. declined during the first quarter (January- March) of 2008, as the maturing market was hit by a slowing U.S. economy.
U.S. purchases of new cell phones declined in the first quarter (January- March, 2008) for the first time in several years, signaling that worries about an economic slowdown are hurting the handset market, according to two new studies, reports The Wall Street Journal.
Nearly 31 million handsets were sold in the U.S. during the first quarter of this year (2008), down 22 % from the same period a year ago, according to the NPD Group. Sales of mobile handsets generated USD 2.7 billion, down from USD 2.9 billion for the same period a year ago (2007), reports Cnet News.com.
The main reason for decline in mobile handset sale is a slowing economy and a maturing U.S. wireless market. Due to the maturing U.S. wireless market, in which more than eight in 10 Americans owning a cell phone, demand is dropping.
Also some factors like due to wider adoption of post-paid cellular plans and high end mobile phone sales has dropped the sales of pre-paid and basic cell phones, which in turn is reshaping the overall U.S. mobile handset market.
Some other important factors like growth in the sales of mobile handset are slowing down in the low income group and children and keeping the sales dry.
Ian Shepherdson, chief US economist for High Frequency Economics, said: “Mobile phones are, on the whole, a discretionary spend item. None of us really need to upgrade to a better model. The outlook for retail sales in the US is horrible. We expect it to be extraordinarily weak for the foreseeable future, and by that I mean definitely this year and probably next. We have not hit the bottom yet.” reports Times Online.
According to research analyst at Arth Business Research, “As the U.S. is facing an economic slowdown and at the same time mobile handset market is maturing with most of the people owns a handset is expected force the mobile handset market in U.S. to go slow further. Also declining demand from low income group and children who are the key motivator for the mobile handset market is expected to push the sales further.”
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