Mobile handset sales to recover in fourth quarter

By Tarmo Virki, European technology correspondent

HELSINKI (Reuters) - Global sales of mobile handsets will snap a four-quarter losing streak in the last three months of the year as the industry is bouyed by a burgeoning economic recovery, a Reuters poll of analysts showed on Tuesday.

Sales are expected to rise 3 percent in the fourth quarter, as a stronger Christmas period adds some lustre to a 6.9 percent decline predicted for the full year, the poll of 31 banks, brokerages and research firms showed.

"The global handset industry will be heading out of recession in the fourth quarter," said Neil Mawston, analyst with Strategy Analytics.

While the broader industry has struggled, sales of smartphones have boomed, and analysts predict the smartphone market will grow 20 to 30 percent this year.

However, there are signs increased competition is starting to pressure margins and put some firms on the back foot.

This week the world's No. 4 smartphone brand HTC (2498.TW) said it expects fourth-quarter revenue to fall almost 15 percent from the same period a year earlier, as the sharpening rivalry forces prices lower.

Growth in the smartphone market slowed to just 4 percent in the third quarter, from 13 percent annual growth seen in the previous quarter, according to research firm Canalys.

"Consumers in Europe and Asia seem to continue to gravitate towards low-end smartphones and feature phones equipped with touch screens," said analyst Tero Kuittinen from MKM Partners.

"This is putting extra pressure on high-end smartphone pricing," Kuittinen said.

HTC said it expects its average price to fall some 10 percent in the fourth quarter.

Nokia cut phone prices across its whole portfolio in mid-October, with analysts saying the quarterly price cuts were spread quite evenly across the models at around 5 percent level.

CHRISTMAS AHEAD

Analysts expectations for the overall handset market outlook have improved slightly from an October 7 poll.

Expectations for 2009 and 2010 sales volumes of Korean groups LG (066570.KS) and Samsung OO5930.KS have increased further in the last month, while predictions for market leader Nokia (NOK1V.HE) sales are little changed.

"We think Christmas will be much better this year," said Gartner analyst Carolina Milanesi. "In 2010 LG and Samsung will grow; Apple will really establish itself outside the United States."