LOS ALTOS, CA – Although capital investment outlays will slow, the communications equipment industry will survive the economic downturn in reasonable shape, says Henderson Ventures.
 
Worldwide equipment production will slow from a 6.8% rate in 2007 to a 3.2% pace this year, according to the research firm. A further deceleration will take growth rates to 2.7% next year before rebounding to 9.6% in 2010.
 
China is expected to achieve a solid 9.6% gain this year. Even so, that pales before the 19.8% burst chalked up during 2007, says Henderson.
 
During the past few years, the total number of handset subscribers has mushroomed as prices have plunged to meet market requirements in developing countries. But a dwindling unserved market, along with a poor economic environment during 2009, is likely to result in a drop in new subscribers, the company predicts.
 
Handset shipments are slated to decelerate sharply, as the economic environment encourages cellphone owners to postpone the purchase of upgraded handsets. Shipment growth is predicted to decelerate from 15.1% in 2007 through 7.8% in 2008 to only 3.9% next year.
 
And given the increased emphasis on developing markets, handset revenues are forecast to be stagnant next year. The ongoing financial crisis is expected to be resolved by 2010. Rejuvenated economic growth and a new replacement cycle will create a 9.5% unit gain that year.