Slowing Handset Replacements in Nth America Could Slow Global Sales Growth
A report from South Korean research house, Korea Investment & Securities says that it expects sales of mobile phones worldwide to have risen by 11.7% YoY to 281 million units. In 2008, the handset demand growth is forecast to drop 4.2%p YoY to 12.1% from 16.3%, due to sluggish replacement demand in North America and anemic new demand in emerging markets.
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QoQ change in handset shipments
By manufacturer, LG is the only one to expect a growth in shipments in 1Q08, up 1.0% QoQ, and its operating margin should rise to 12.0%. As for Samsung, 1Q08F shipments should slip 1.1% QoQ to 45.8 million units, and its operating margin is expected to rise to 14.5%. Nokia is expected to see an 18.5% QoQ drop in shipments at 109 million units, overwhelmed by seasonally weak demand.
Sony-Ericsson, which is competing heavily with Korean handset makers in the high-end market, is likely to post poor earnings, as its shipments should plummet by 28.4% QoQ due to the delayed release of new models and the sluggish sales of existing models. Motorola, which is planning to spin off its handset division, is also projected to record poor earnings.
Currently, Samsung, LGE, and Motorola are able to supply EV-DO phones to EV-DO service providers such as Verizon Wireless and Sprint PCS. However, due to Motorola’s recent poor performance and business uncertainties, the research house says that preference for Korean handset makers has been on the rise.
Posted to the site on 14th April 2008
