IDC: Smartphones remain recession proof

The local market declined 16.1 percent year-on-year (Y/Y) to just under 2.98 million units in 2008.

The smartphone segment grew by 7.6 percent Y/Y according to IDC's quarter four (Q4) 2008 Quarterly Mobile Phone Tracker.

Mark Novosel, market analyst, Telecommunications at IDC said the majority of the Y/Y decline in Q4 2008 was due to the unsustainable boom caused by Telstra's CDMA to Next G migration in Q4 2007, the actual effect of the slowing economy is less significant at this stage.

He said as Australia's economy teeters on the edge of recession high-end of converged device market was poised to take a hit throughout 2009.

However, more affordable mid-range converged devices should perform strongly as consumer demand for converged devices remains strong.

"Converged devices available around the $49 per month price-point should do well in 2009," said Novosel.

"It's difficult to imagine anyone giving up their mobile phone despite growing negativity in the economy.

"It's likely some consumers on higher plans will start cutting back on their mobile spend when it's time to renew their contract."

Despite flow-on effects from the decline of the Australian dollar in the second half of 2008, resulting in increased device prices and decreased discounting, there is a growing portfolio of capable mid-range converged devices to tempt consumers.

The iPhone 3G hype from 2008 has largely faded with shipments falling 26.9 percent quarter on quarter.

Carriers around the world have cut iPhone prices in the lead-up to an expected new product announcement in the first half of 2009.

"iPhone 3G price cuts will inject some new life into the current model, however this is largely used to clear existing stock in anticipation of a product refresh," said Novosel.