LONDON/WASHINGTON: The current downturn marks the first sustained interruption to the growth of the mobile phone industry, according to research undertaken for WARC Online's Recession Watch.

Recession Watch is a new weekly feature that aims to assess the impact of the financial crisis on a variety different branded product sectors.

The opening quarter of 2009 demonstrated that the recession has certainly taken a toll on many of the major players in the mobile sector, and the acceleration of a broader shift taking place within it.

Nokia, the world's biggest handset maker, registered a 90% decline in profits during the first three months of this year to $161 million (€122m; £110m), with revenues also falling by 27% to $12.2 billion.

The Finnish company sold 93 million units from January to March, down by 19% on an annual basis, resulting in a slide of 2% in its global market share, which now stands at 37% in all.

Moody's, the ratings agency, has downgraded Nokia's outlook from "stable" to "negative" on the basis of its performance in this period, and sees few signs of an immediate upturn in its fortunes.

LG, the third-biggest mobile company globally, also posted a 25% drop off in operating profit, to $337.1m, in Q1, selling 22.6 million handsets, a decrease of 3.1 million quarter-on-quarter.

These figures were actually ahead of analysts' expectations, but compared with an increase in sales of almost a third of its flat-screen LCD TVs.

Worse still, Sony Ericsson, reported a loss of €293m in the most recent reporting period, against a profit of €133m a year ago.

Its sales of €1.74bn were off by around 1 billion year-on-year, and amounted to a slide in sales of 14.5 million units, or 40%, quarter-on-quarter, including declines in Latin America, India and Africa.

This overall situation could be attributed to a combination of slowing consumer demand and extremely high levels of market penetration, if not saturation, in most advanced nations.

However, the demise was not universal, as shown by Apple, where a quartely income of $1.21bn and revenues of $8.16bn were up from $1.05bn and $7.51bn respectively on their 2008 equivalents.

The contribution of its other brands should not be underestimated, with iPod purchases rising by 3% to 11.01 million, offsetting a decrease of Mac deliveries of 3% to 2.2 million.

However, sales of the iPhone increased by a total of 123% to 3.79 million in Q1, including 1.6 million units in the US alone, where the company has an exclusive deal with AT&T.

Research in Motion, the maker of BlackBerry, also enjoyed an upturn in earnings to $518.3m in the three months to the end of its last financial year.

Its revenues grew to $3.46bn from $1.88bn on an annual basis, and the company added 3.9 million new subscribers, taking its user base to 25 million.

Of the former group, 70% were individuals rather than corporate users, meaning the overall balance of BlackBerry users is now evenly split between consumers and enterprises.

As such, it appears that "smartphones" could represent the future of the mobile industry, with Samsung estimating that total unit sales will increase from 170 million this year to 500 million in 2012.

This will constitute a growth in market share from 14% to 29%, a trend that could realistically gather a

Data sourced from Wall Street Journal/Financial Times/Bloomberg; additional content by WARC staff