Samsung Feeling Effects Of Cellphone Market Crunch
Posted on: Monday, 24 November 2008, 13:05 CST
In the newest indicator that weaker consumer confidence is hitting the world's wireless sector, Samsung Electronics on Monday sent out a warning over cellphone market growth this year and next.
James Chung, a spokesman for Samsung, said the actual global market growth on a unit basis could fall short of the company’s initial forecast for 9 percent growth (in 2008).
"As for next year, it is possible that the market could post a single-digit or even negative growth," Chung added.
On November 14, top handset maker Nokia Oyj warned that the world's mobile phone market would fall in the fourth quarter as well as the following year, as the economic slowdown has slowed consumer demand.
"At the moment it's all doom and gloom for several quarters," said CCS Insight analyst Geoff Blaber.
Telecom operators in developed markets have also cut subsidies, increasing problems further.
"Handsets are essentially far more expensive than they were four months ago. That just makes the situation worse for everyone in the value chain," Blaber said.
Salcomp, the world's largest handset charger maker, warned last week that its 2008 sales would fall from a year ago, saying its clients have continued to clearly cut sales forecasts each week.
"More negative news is coming all the time, the situation is turning worse all the time," said Martti Larjo, analyst with Nordea in Helsinki.
In June, Samsung issued its 9 percent global handset growth forecast, and until now had refrained from issuing any forecast regarding 2009.
But analysts have said it would be almost impossible in the current economic situation for Samsung to reach a 6-7 percent annual rise in the fourth-quarter to achieve its 9-percent market growth.
"The market will certainly be down year-on-year in the fourth quarter," said Nordea's Larjo.
So far this year, handset makers have remained relatively unscathed by the global economic crisis.
However, successive warnings from Nokia, Qualcomm and Intel signal a rapid deterioration of consumer electronics demand.
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Source: redOrbit Staff & Wire Reports
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User Comments (1)
| 1. |
Posted by bobby on 11/25/2008, 03:44 The market will gravitate to two areas; cheap phones for basic use, and smart phones, for multi platform use. Always need cheap phones. Smart phone sales will gravitate toward the best of the best. Blackberry Storm and iPhone and the google phone should see no problems, but the 'wannabees' smartphone market should suffer. When times are tough and bucks are tight, people will opt for quality and performance. I would never step down from my iPhone, now that I know what the quality phones offer over the 'wish I was one' phones. Would you? Just thinning the heard. Meet the demands of an ever more selective buyer. |
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