The convergence continues, as dumb phones and desktops cede passage to smartphones and notebooks, two devices that in a few years’ time will likely become one. Mobile phone shipments fell 10.8 percent year-over-year in Q2 2009, dropping from 302.2 million unit shipments in Q2 2008 to 269.6 million in Q2 2009, according to IDC. "The challenges from the previous nine months – aggressive channel destocking, foreign exchange volatility, and uncertain demand – continued to plague the mobile phone market in the second quarter, but were not as severe as before," says IDC’s Ramon Llamas.

Sales were better than Q1, during which the market dropped 17.2 percent. IDC projects that the segment will decline 13 percent overall in 2009. Smartphones and other high-end devices continue to provide the industry’s silver lining, as the market continues to adjust to increasing competitiveness.

"This demand for high-end mobile phones has created a price war among large mobile operators and handset vendors. Apple's 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," says IDC analyst Ryan Reith.

The other side of mobile communications, portable computers, is doing quite well in comparison, with global notebook sales growing 63 percent year-over-year, the only positive in the struggling PC market.

Notebooks now represent 58.9 percent of total PC sales. This ratio is considerably higher in the consumer computing market, as netbooks now comprise three-quarters of all PC shipments, jumping from 62 percent year-over-year.

As smartphone capabilities increase and notebook size and price fall, the two markets continue to merge.

“The proliferation of activity in the consumer notebook market has led to the emergence of new channels, in particular the telecom carriers, who are now playing a critical role in the distribution of netbooks to their own customers in an effort to bundle new services or even as an incentive to sign up new customers,” according to IDC.

By Mark Alvarez