Sim Only Demand Could Cause Handset Sales Slump

Analysts are predicting that 2012 might be a less than stellar year for the mobile market as price-conscious consumers choose to buy sim only deals and keep their existing handsets for extended periods, according to Mobile Magazine.

While the global economic turmoil has not taken too much of its toll on the mobile industry, things are apparently less promising for the next 12 months, with the smartphone boom petering out, based on figures published by regulator Ofcom.

Forty-six per cent of the UK mobile-owning population has invested in a smartphone so far but Ofcom's report seems to suggest that saturation point has been reached, as just three per cent of those without a multi-featured handset will actually upgrade from their bog standard model next year.

Market expert, Shaun Collins, explained that for many mobile users the cycle of constant upgrades could be ending. With the value on offer to those who stick with their current phone and choose a sim only tariff there will be fewer people looking to invest in a new model in 2012.

Another reason behind the predicted slowdown is that consumers are anticipating the arrival of 4G networking in the UK. This would make the current crop of 3G smartphones seem a little sluggish by comparison and would mean that a two year contract acquired now would leave tech fans lumbered with an outdated piece of hardware.

One industry insider said that there was simply too much choice on the market at the moment for manufacturers to capitalise. With about eight leading smartphones to choose from, only two or three will realistically become favourites amongst UK buyers, according to the source.

2012 could be a year of major changes in the mobile market and the UK has operated on an admittedly odd model in which handsets have been consistently subsidised by networks. The growing popularity of sim only deals is also playing its part.