Gartner now predicts the market will grow by 10-11 percent in 2008, having forecast growth would be between the 10 and 15 percent range just two months ago.

Last year, the handset market grew by 16 percent, according to the market research group.

"In the last month however, the economic environment started to negatively impact emerging markets as well as mature," said Carolina Milanesi, head of mobile device research at Gartner.

"Signals for a weaker than expected second quarter have arrived from Sony Ericsson as well as some component manufacturers," added Milanesi.

Last month, Sony Ericsson warned second-quarter sales and net income would be hit by slowing demand for mid- to high-end models, and that it would only break even for the quarter, adding the market was "challenging".

And in April, market leader Nokia — which is due to report second quarter earning later this week — also warned the value of the cellphone market would decline in 2008 in euro terms, meaning average prices are falling more than volumes are increasing.

By: DocMemory
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