Ericsson says global mobile market is "flattish" in 2009

But losses in the North are offset by growth in the South.

Published October 21, 2008 6:22PM (EDT)

While the economic crisis is hitting pretty much every sector across Silicon Valley, the United States and the globe as a whole, Ericsson said late yesterday that it expected to have a "flattish" mobile market in 2009. In other words, reports the Financial Times, its losses in Western Europe and North America are being offset by growth pretty much everywhere else: Asia-Pacific, Central and Eastern Europe, Middle East and Africa and Latin America.

Got that? The gains in most of the rest of the world are offsetting the losses that are to be expected in Western Europe and North America.

Earlier this month, analysts cut global growth rate expectations due to the rise in economic doom and gloom.

Reuters reported about two weeks ago that:

UBS analyst Maynard Um halved his forecast for 2009 global handset growth to 3 percent from 6 percent, pointing to particular weakness in Europe and North America.

and that:

JPMorgan analyst Ehud Gelblum was more optimistic, but still cut his expectations for 2009 handset growth to 6.1 percent from 8.1 percent, citing consumer reluctance to upgrade phones, particularly in Europe, and "more modest" growth in China, one of the fastest-expanding mobile markets.

So the fact that the developing world can keep the mobile industry in the black is not that surprising, given how much mobile phones have affected the developing world, especially in Africa.

Just last year, Ericsson opened its third regional office, in Nairobi, according to the Pan-African News Agency:

South Africa has 118 million mobile phone subscribers out of the continent's 650 million, a fact that Ericsson says is testimony to the potential for growth. Africa's mobile phone subscriptions make up 12.5 percent of Ericsson's mobile phone subscriber base worldwide.

"There is no reason why a country like Kenya should not generate up to 50 percent penetration but part of the problem is the really high tariff. Mobile phone is an expensive item," [Goran Soderholm, Ericsson Africa Vice President] told PANA. Kenya has projected the number of mobile phone subscribers would double over the next eight years from the current eight million to 16 million.

Kenyan Information and Communication Minister, Mutahi Kagwe said after opening the new Ericsson regional office in Nairobi that the government backs plans to increase the number of subscribers from 8 million to 16 million by ensuring that operators receive incentives like discounts on frequencies required for moving the mobile phone services to rural areas.

Nokia wants in on the action too -- it just launched a regional research center last month, also in Nairobi.

Meanwhile, in some places, like Afghanistan, where mobile phones are making a big difference, they're also being used as weapons against entire populations.

By Cyrus Farivar

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