Global handset market to see slower decline in H2

FRANKFURT, July 30 (Reuters) - Global cellphone makers will see slower decline in sales in the second half of 2009 than in the prior three quarters, giving hope that the worst may be over for handset sales, market researchers Strategy Analytics said.

Strategy Analytics said in a report released on Thursday that improved consumer confidence in some regions, such as China, and partial restocking of some retailers' depleted supplies had led to less of a decline in the second quarter.

"These factors indicate to us that the global market is showing signs of stabilisation and the worst of the handset recession may be over," Strategy Analytics said.

Research firm IDC said separately that it saw small signs of improvement thanks to consumer demand for high-end handsets and manufacturers accommodating consumer's wishes in their portfolio.

IDC said it expected a 13 percent decline in handset sales for the full year, while Strategy Analytics said it saw an annual decline of 5 percent.

Handset makers have struggled with a market contraction for three consecutive quarters, with the first three months of 2009 showing the worst ever growth in the industry, Strategy Analytics said.

The Boston-based firm said shipments in the second quarter 2009 dropped 8 percent to 273 million handsets worldwide compared with the previous year. That was an improvement from a decline of 14 percent in the first quarter of this year and a fall of 11 percent in the last three months of 2008.

According to IDC data, global handset sales in the second quarter dropped 10.8 percent year on year, less of a decline than the 17.2 percent decrease seen in the first quarter of 2009.

"The challenges from the previous nine months - aggressive channel destocking, foreign exchange volatility, and uncertain demand -- continued to plague the mobile phone sector but were not as severe as before," IDC said.

IDC analyst Ryan Reith said demand for high-end mobile phones had created a price-war among vendors.

"Apple's (AAPL.O) price cut on the iPhone 3G reflects a trend we expect to continue in the upcoming quarters, and one that will effectively maintain competitive pricing within mature markets," he said.

The top five mobile phone vendors are Nokia (NOK1V.HE), Samsung (005930.KS), LG Electronics (066570.KS), Motorola MOT.N and Sony (6758.T) Ericsson (ERICb.ST).

Nokia has the largest market share by far with around 40 percent. Samsung has around 20 percent, LG about 11 percent and Motorola and Sony Ericsson both have around five percent. (Reporting by Nicola Leske; editing by Karen Foster)