In November, when I was in Macau for the Mobile Asia Congress, I noted much optimism from the mobile network operators (MNOs) collectively expressing belief that mobile phones were now such  a fundamental consumer utility, that they didn’t believe they would see revenues drop, despite the challenging economic downturn.

CEO after CEO stood at the podium, pointed at the hockey-stick growth of mobile broadband and (I paraphrase here) said (to use a blatant Australian-ism): “She’ll be right, mate”. 

What I failed to observe at the time was that they were of course referring to the networks themselves, and clearly not the entire industry.

Earlier this month IDC forecast that the mobile handset market would shrink by up to 8% this year, and while the smartphone market would provide a glimmer of hope (with 3% growth) it appears 2009 will be the first year in history that the handset market will actually recede.  And last week Sony Ericsson provided downward market guidance in advance of what could be a half-billion USD loss for the quarter.

One of the big drivers for the mobile handset industry, especially in Asia, can be attributed to the “bling” factor – anecdotally there were market segments in Hong Kong, for example, where the average handset life was a little over three months.  Yes, consumers that would buy new handsets before Nokia could announce them. Between these voracious early adopters, and emerging markets like China and India, it was no wonder than handset shipments kept growing.

Now, of course, times are different.  We may well keep up our spending on voice, SMS and mobile data – all of which are becoming cheaper on a daily basis – but we’ll think twice before we upgrade that 15-month old handset.  And that will present a significant challenge for the likes of Nokia, LG, Motorola and Samsung – not just Sony-Ericsson (or whomever is left from the partnership).

Ever-conservative Gartner is suggesting the handset industry “continues to be challenging” – what will possibly end up as one of the understatements of the year.

I suggested in a presentation last week that the handset industry continues to be pretty uninspiring, at least if the “me too” features and announcements from Barcelona last month were any indication.

Now I feel I may have judged them a little too harshly. Forget new features, this is a year when basic survival might be the handset release of the year.