Cellphone makers are heading straight into a cold, dry winter as sales are expected to drop to their lowest point since the beginning of the decade, WSJ reports. Nokia (NYSE: NOK), Qualcomm (NSDQ: QCOM) and Vodafone (NYSE: VOD) have all come clean and warned that the outlook looks grim for the remainder of the year and admit there’s little reason to expect anything better in 2009. Manufacturers know all too well that consumers typically clamp down on phone upgrades during lean economic times, and that doesn’t bode well since replacement sales comprise about 75 percent of all cellphone sales each year. Handset sales grew 15 percent in the first half of the year, but demand has quickly vanished, and analysts expect growth to drop to between 1 and 9 percent next year.

The slowdown will likely lead to a wave of consolidation, including acquisitions, bankruptcies or business closures. “This slowdown presages a shakeout, especially among companies whose balance sheets were not in great shape to begin with… This exacerbates the pressure on the weaker players throughout the industry,” Deutsche Bank telecom analyst Brian Modoff told the WSJ. Those with large smartphone portfolios pushing the latest and greatest technologies and features are expected to the weather the storm best. Meanwhile, the companies that mostly target mid-range phones like Motorola (NYSE: MOT) and Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) will face a tough road. Sales are dropping off dramatically in India and China while BlackBerry-maker Research In Motion, Apple (NSDQ: AAPL) and HTC are outperforming on many fronts.

The largest phone manufacturer, Nokia, could come out with an even larger global market share. While the company makes many low-end phone sales in India it also boasts operating margins of more than double its closest competitors in the market. “Nokia needs these forest fires to clear out the competitive threats,” Tero Kuittinen, senior analyst at Global Crown Capital LLC, told the WSJ. In the dot-com meltdown, he noted that six handset makers shuttered their doors.