With the second quarter of 2008 coming to a close in the midst of a widely reported economic slowdown, the mobile device segment is one market doing so well its financial results surprised most in the industry, including themselves. According to three separate studies released this week, the 2008 global mobile device market is thriving when others continue to struggle. ABI Research, IDC and Strategy Analytics all released stronger than expected estimations of mobile device shipments for Q2.

“I think that the big companies like Sony Ericcson, Nokia went public and said they don’t expect things to be as good as they thought for the overall market and such just as a forewarning that they might not do as well as themselves,” said Ryan Reith, senior research analyst with IDC's Mobile Phone Tracker. “In some sense, they surprised themselves, and the overall market certainly surprised them by some of the smaller vendors contributing rather than just the top five. The economic situation right now obviously is not in a good state, but mobile phones are still being looked at not such much as a luxury item but moreso as a necessity at this point in time.”

Overall, tier one handset vendors in Q2 of this year saw year-over-year unit shipment growth between 15% and 22%. According to ABI’s estimates, 301 million units were shipped during the quarter, keeping the market on course to ship 1.3 billion units before the year’s end – a growth rate of 13%. Strategy Analytics put the number of units shipped around 297 million in Q2, and IDC estimated around 306 million units, an increase of 5.6% from the 289.7 million units shipped during Q1 and up 15.3% from the 265.4 million units shipped during this time last year.

“We are now at the stage where communication is more of a mobile has-to whereas 10 years ago, everyone had a wireline and if something went down, you’d obviously have to replace it,” Reith said. “We’re just not seeing the economy affecting this market so much. I think that we’ve seen the effect more so on the side of average selling prices. You look at a lot of these companies that announced good shipment volumes, but their average selling price per handset has actually dropped for most of the top vendors.”

Reith said that demand for maintaining the high-end features but not keeping the $400 price point of four years ago is what the industry is pushing them towards. IDC put Smartphone growth rate around 40% year-over-year, while the rest of the industry grew at 10%. Even converged mobile devices saw solid growth, accounting for nearly a fifth of mobile phone shipments. Competition amongst these high-end phones is only increasing as well. As feature phones become more sophisticated, they are competing with Smartphones for high-end users wanting to pay a low-end price.