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Mobile phone market buzzing again

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The UK mobile handsets market has shown signs of improvement in recent months, fuelled by the ongoing success of the contract market.

According to the retail and technology sector of market research group GfK Group, the industry may finally be moving on from the recession after it posted three consecutive months of year-on-year growth in April, May and June.

Sales in June were 6.8 per cent up on the same month in 2009, with the continued demand for smartphones ensuring the contract market was rarely in decline over the course of the last year.

Apple, for example, has reported significant improvement in sales of its iPhone.

The company sold 8.4 million iPhones in the three months to June 26th, which represented a 61 per cent increase year-on-year.

However, GfK Retail and Technology thinks there is still room for an overall improvement in handsets sales.

A statement from the group said: “The total market has seen a decline due to the large regression of the prepay market during the same period, which until April had only seen a single period of growth during the last year.

“However, a series of successful below-the-line promotional activities across the industry has pushed the prepay market back into growth, taking the total market with it.”

Another imminent concern is a potential prepay market decline if there is no sustained period of promotional activity, while the total market could fall back into negative growth later in 2010 due to the mass shift from 18 to 24-month tariffs in 2008 creating a “contract lull”.

On the other hand, “highly anticipated new product launches” are likely to continue to drive the contract market over the coming months.

Published on Wednesday 25 August by Editorial Assistant

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