NEW YORK, NYAccording to ABI Research Asia-Pacific Vice President Jake Saunders, "Given the traumatic news ricocheting around the financial markets, one would almost expect mobile handset markets to have nosedived. However, the third quarter of 2008 still delivered 8.2 percent year-on-year growth." Although mobile phones can be viewed as fashion accessories, they do have other value propositions. Substantial improvements in memory, battery life, data speed, and processor speed are being noticed by end users. Still, many are opting to remain on open contracts rather than upgrade their handsets and lock themselves into downpayments for new phones.

The positive news is that handset vendors are reporting that input costs for handsets are on a downward curve. Vendors also refreshed their handset portfolios and have strengthened their mid-tier and low-tier handset lineups to appeal to end users on tighter budgets. The fourth quarter will be vital for handset vendors and mobile operators. Both are expected to engage in aggressive marketing and promotional activities as they strive to lure end users to upgrade their handsets before year's end.

ABI Research has revised its expectations for the fourth quarter of 2008 down to 7.5-percent growth from 10.4 percent. Year-on-year annual growth is likely to be between 10.5 percent and 11 percent to close out the year at around 1.27 billion. There are winners and losers for the third quarter. Nokia stumbled slightly to see its market share shrink to 37.7 percent. Motorola and LG were also net losers (total market share: 8.1 percent and 7.4 percent, respectively). Winners include Samsung (16.6 percent), Apple (2.2 percent), and RIM (2.0 percent). Nokia would have fared worse were it not for its strong lineup in the mid-tier and low-tier handset segments, which is where LG and Motorola felt the impact. SonyEricsson managed to keep marketshare constant at 8.2 percent.

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