Tumult on the retail scene: For cellphones, gloom, not doom

The conventional wisdom on wireless retail sales appeared to be borne out by several surveys released in recent days.
That wisdom is several-fold:
— The handset market is contracting and 2008 may see about 8% growth, down from the 9% to 10% once forecast by Samsung Electronics Co. Ltd. and Nokia Corp., respectively, according to research firm Gartner.
— Smartphones will continue to be the focus, with perhaps 9% growth in 2009 over 2008, according to Oliver Wyman, a management consulting company. That growth is slower than past years’ smartphone growth, but considerably better than the single-digit negative growth for the overall handset market next forecast by Gartner.
— Landline telecom accounts will go before wireless service is cut, Oliver Wyman said.
— Wireless devices and service are near and dear to consumers’ hearts and that sector will fare better than consumer electronics in general, which will fare better than general retail, according to NPD Group.
–NPD Group forecast the weakest holiday season for consumer electronics in more than a decade.
But there’s some good news mixed into these forecasts.
ABI Research found that while 47% of respondents plan to decrease holiday spending from last year’s levels, 53% plan to spend the same amount or more.
The Consumer Electronics Association may be on to similar, optimistic data as ABI, as the CEA projected 3.5% sequential growth in the fourth quarter – still, that was half last year’s forecast at the same juncture.
Nonetheless, consumer electronics in general is struggling with the economic downturn: Best Buy recently reported it saw sales drop 7.8% in the United States in October, on top of a 2.4% drop in September. Competitor Circuit City has filed for Chapter 11.
Best Buy CEO Brad Anderson referred to what he called “rapid, seismic changes in consumer behavior” since mid-September, and projected 5% to 15% declines in comparable-store sales year-on-year.