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Analysts lower phone outlook on economy woes

updated 10:25 am EDT, Wed October 8, 2008

Analysts Drop Phone Ests

Rapidly spreading economic deterioration is likely to have a severe impact on the growth of cellphone sales next year, according to estimates published today by analysts. UBS technology researcher Maynard Um is one of the most conservative and now says the phone industry will grow at just half the rate in 2009 as estimated earlier, with shipments moving upwards by just three percent versus an earlier six percent prediction. Um dismisses claims that phones are less likely to be affected and says there should be a direct link between poorer economies and reduced spending on phones.

The analyst further claims the chilling effect will be especially apparent in Europe and North America, where the economic impact is more direct. Investors also shouldn't assume the lowered forecast will only affect particular companies, according to Um, who notes that market leader Nokia will likely be joined by Motorola and Samsung. Both of these are also fighting to keep or grow market share.

JP Morgan's Ehud Gelblum has also partly trimmed down his view of 2009 cellphone sales from 8.1 percent to 6.1 percent. He expresses more faith in the market but says Europeans will be less likely to replace older phones while Chinese will be less likely to buy phones regardless of whether they are new or existing owners.

Nokia itself has also warned of a slowdown as early as this summer but has partly attributed damage to its sales to smartphones such as the iPhone as well as the delayed launch of what's now known as the 5800 XpressMusic.

by MacNN Staff



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