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Handset Market Growth Slows

By Reuters  |  Posted 07-14-2008 Print
Gartner lowers its forecast for cellphone sales as economic slowdown cuts demand.

The global economic slowdown has started to crimp demand for new cellphones, leading top handset research house Gartner to lower its market growth forecast, and top phone-charger maker Salcomp to warn on profits.

Research firm Gartner cut its forecast for the cellphone market to 10-11 percent. At the end of May Gartner forecast 10-15 percent more phones would be sold this year.

"In the last month however, the economic environment started to negatively impact emerging markets as well as mature," Carolina Milanesi, head of mobile device research at Gartner, said Monday.

Last year cellphone market volumes grew 16 percent year on year.

In April Nokia, the world's largest cellphone maker, warned the value of the cellphone market would decline in 2008 in euro terms, meaning average prices are falling more than volumes are increasing.

"Signals for a weaker than expected second quarter have arrived from Sony Ericsson as well as some component manufacturers," Milanesi said.

The world's fifth largest phone maker, Sony Ericsson, warned on June 27 it would make no profit in the April-June quarter due to weaker demand for its more expensive phones, and said the market was challenging.

"Despite expecting a stronger second half, we feel that the weakness of the first half has pulled the overall year growth down to 10-11 percent," Milanesi said.


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