Nearly every category has seen sales drop sharply as the global economy contracts. In general, you have suddenly realized that “necessary” purchases are actually “discretionary” purchases. The new computer, the car, the winter jacket, everything can be postponed.

Cell phone sales were no exception. According to IDC:

Overall cell phone sales in the fourth quarter fell 12.6 percent compared to the fourth quarter of 2007. In the fourth quarter of 2008, manufacturers shipped a total of 289.0 million units, compared to 330.8 million units shipped during the fourth quarter of the year. behind.

But for cell phones, the real story appears to be much bleaker. More than half of the world’s 6 billion already have a cell phone. There are already about 4 billion cell phones in use. That means that after years of double-digit growth; the party is over.

The iPhone and other smartphones continue to show growth, even in this down economy. But they represent only a tiny fraction of global cell phone sales. The growth of basic phones will NEVER recover. Instead, providers expect the demand for new services to increase each subscriber’s monthly bill. For example, Mobile Banking is experiencing very strong growth. The Wall Street Journal reported yesterday:

Bank of America says users of its mobile banking service have nearly doubled in the past six months, from 1 million in June 2008 to 1.9 million today. Nationwide, the number of people banking online rose from 400,000 in 2007 to 3.1 million at the end of 2008, according to ABI Research, a firm that tracks technology trends.

Verizon Wireless reported last week that much of its growth in the fourth quarter came from data services. Average revenue per user for data services increased 27.9 percent in the quarter, compared to the same quarter a year ago.

But, with slow growth and huge capacity, we should actually start to see strong downward pressure on rate plans. Especially as the market sees more Android-based phones that can run on any carrier and WiFi phones that can take advantage of a growing number of hotspots to acquire their data.

So when my broker suggested we invest in Verizon high yield bonds the other day; He was less than enthusiastic. Unlike cable providers who seem able to continually raise rates without offering more value, wireless providers are waking up to an open and increasingly competitive market. Prices and earnings can only go one way. And it’s not up.