The mobile phone industry recently reached the milestone of 4 billion connections worldwide, but the cold winds of economic crisis will chill celebrations at the sector’s biggest annual gathering this week.
The majority of the planet is now texting, calling or surfing on mobile handsets and the potential for growth in developing countries is undiminished — 2.7 billion are still without a connection.
Yet despite this and the relatively recession-proof business of providing telephone connections, the industry as a whole is bracing for a downturn and anticipating a fall in investment.
As well as the launch of new products and industry initiatives, the crisis is set to dominate the four-day Mobile World Congress, the world’s biggest industry event, which begins today in Barcelona, Spain.
“For a long time people believed that telecoms would be spared, but as it is a global crisis everyone is going to be affected,” said Thomas Husson, an analyst for research group Forrester.
The network operators are better protected than others because consumers are unlikely to drastically cut back on making calls or sending text messages.
“The telecom sector compared with others such as the automobile industry or finance, is nevertheless better protected, notably because of the need to renew handsets and monthly subscription payments that generate steady income,” Husson said.
Makers of handsets, those counting on the development of advertising on mobile, or the leading players in the multi-billion dollar industry for building mobile networks are already feeling the pinch, however.
Finland’s mighty group Nokia, the biggest handset maker in the world, announced a near 20 percent fall in handset sales in the fourth quarter of last year. It reported a sharp drop in profit and said it would concentrate on cutting costs this year.
Research group Gartner predicts that annual handset sales will fall this year for the first time in history, declining 1 percent to 4 percent.
The event in Barcelona brings together 60,000 industry insiders from 1,200 companies, said organizers, the GSMA Association.
All the major network operators such as Vodafone, MTN or China Mobile will be present, as well as handset makers like Nokia or Samsung. Microsoft, Yahoo and a host of start-ups looking to tout their services will also attend.
One notable absence will be Californian trailblazer Apple, whose new iPhone was the talk of the event last year.
Its influence can be seen in the design of any of the new top-end models brought out by rival manufacturers.
One among many new product launches expected at the show will be the first mobile phones from Taiwan-based IT manufacturer Acer. One of them, rumors on mobile phone Web sites say, will be double-sided with screens on each face.
Fellow Asian computer makers Toshiba and Asus are also looking to enter the market, while US-based Dell is also said to be weighing a move.
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