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Bleak Forecast for Mobile Phone Carriers

After 25 years of consistent market growth, the mobile phone business now faces huge challenges this year from a bad global economy and a lack of meaningful new service features, according to the latest market study by In-Stat.

The bleak cell phone industry outlook is unprecedented, with dramatic ramifications for device manufacturers, semiconductor manufacturers, infrastructure system vendors and mobile operators alike.

"While the cell phone industry has generally been unaffected by economic ups and downs, the near future is different," says Allen Nogee, In-Stat analyst.

The current economic slowdown is more widespread and deeper than ever experienced during the cellphone's lifetime, and has spread through Europe, Asia, and North America.

In addition, this is the first year without any new major features being added, and last year's new feature, mobile TV, has had very limited success. You may recall the mobile TV anticlimactic results from last year, and the numerous studies that profiled a consistent lack of consumer interest in the service.

In-Stat market study found the following:

- Over 1.2 billon cell phones were estimated to have shipped in 2008, but the growth rate is plummeting.

- For the next five years, cell phone semiconductor revenue will only grow at a 3.3 percent Compound Annual Growth Rate (CAGR).

- Shipments of dual-mode cellular/Wi-Fi phones shipped will quadruple from 2008 to 2012.

- The market for digital baseband semiconductors in WCDMA handsets will reach more than $6 billion annually in 2012.

- In 2008, cell phone semiconductor revenue was expected to reach more than $44.5 billion, up over 6.2 percent over 2007.

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