IDC Outlook for Mobile Growth Negative -8.3%

The worldwide mobile phone market was influenced the economic crisis in the fourth quarter of
2008 - shipments fell 11.6% year over year. It was the first time the
holiday quarter has not recorded double digit growth in seven years.

This closed out a year that was dismal at best, yet overall 2008
managed to grow 4.3% over 2007. This has set the stage for what IDC
predicts to be a very rough 2009, with the most recent market forecast
anticipating growth of -8.3% for the year.

Mature
regions such as Japan, the United States and Western Europe all face
tough times, with predictions of shipment declines ranging from -24.6%
to -12.4% throughout 2009. In these markets, operators are struggling
to find the right mix of marketing and device subsidy to entice
consumers to spend while finances are tight.

The double-digit growth
rates the BRIC countries (Brazil, Russia, India, China) have seen in
the past are also expected to slow to a collective growth rate of 0.3%.
India still remains the bright spot within that group, while Russia is
experiencing a severe cut back in consumer spending and is predicted to
drop significantly.

The
outlook for converged mobile devices (also known as smartphones) has
also been scaled back as a result of the industry's changing dynamics.
The previously stated 8.7% growth has been reduced to 3.4% as IDC
expects all segments to be effected. In the years to come the industry
will undoubtedly migrate more toward the converged device segment, yet
in tough economic times the high price point these devices carry can
tend to stand out in the consumers eye. The notion that this segment
will remain in positive growth while the industry expects an 8.3%
downturn speaks volumes about the potential upside for these devices
when the market turns.

(Percentages represent
year-over-year growth)

"Expectations
for 2009 were negative going into the fourth quarter of 2008. However,
worse-than-expected results and a steady flow of negative economic news
are indicating that 2009 will be gloomier than predicted," said Ryan
Reith, senior research analyst with IDC's Worldwide Mobile Phone
Tracker. "Concern is understandable during this time, but note that the
mobile phone market still has plenty of room to grow on a global scale
and we expect recovery will begin in the first half of 2010."

"Explosive growth of mobile applications adds a new dimension to
converged mobile device growth, one that has resonated with users
worldwide," says Ramon Llamas, senior research analyst with IDC's
Mobile Devices Technology and Trends team. "The success of the Apple
iPhone and App Store has shifted the paradigm for consumer behavior
around this category, and new mobile applications pop up every day. Now
that other companies are poised to launch their own mobile application
sites this year, IDC expects continued growth for converged mobile
devices in the face of an challenging market overall."