The wireless industry is not immune to the downturn. Handset operators from Nokia to Motorola are cutting jobs. So is chipmaker Intel and software giant Microsoft.
Given the fact so many people already have cellphones in their pockets, analysts say handset sales could drop by as much as 20 to 30 per cent this year
Cellphones are like cars: everyone has one and they need one. The health of the industry (and sales) will depend on how often people replace them. And this is where the cellphone industry is much more resistant to a downturn than car makers: people can drive their present car almost forever, but they won't keep their cellphone all that long.
There are a variety of reasons that people will - sooner rather than later - replace or upgrade their phone, ranging from fashion to new features to just wearing out. And while a lot of people will hold out longer, the fact is that a pretty good new cellphone can be had for less than $100 (with the contract). And as long as people keep talking and needing monthly contracts, they will put down a few bucks on a new phone.
In the mean time, the phone makers are trying to increase penetration into more secondary (tertiary?) markets with very low cost phones that still have lots of features (Nokia talks about the "second billion cellphone users").
Overall I would say that the excesses in the industry will be rung out (someone will have to buy Mot), and there will be plenty of job losses and pain, but the industry will stabilize faster than many other segments.