(by Richard Holway 4.00pm 22nd March 09) On 12th March 09, I published an article entitled Major slump in mobile phone shipments. The article was based on IDC Predicts Worldwide Mobile Phone Shipments to fall 8.3% in 2009. I remarked “the sharpness of the downturn almost takes your breath away. An 11.6% decline in Q4 2008 and 10% global decline forecast for ‘traditional mobile phones’ 2009 but a 20.3% decline in the US”.This week the ugly evidence of this hit hard. Sony Ericsson announced that it expected to ship just 14m phones in Q1 – down a staggering 37% on a year back. Their shares plunged 9% as a result. Nokia announced some 1700 job losses and their shares fell 6%. The Telegraph suggests “Motorola, the fifth biggest player, is thought to be on the verge of bankruptcy”. The pain was felt throughout the mobile phone supply chain too. This weekend, Vodafone has sent emails to its UK staff saying that bonuses will not be paid and wages are to be frozen. Vodafone has already made 500 staff redundant.
Gartner reckons that the manufacturers are being hit even harder as it is inventories held in the supply chain that have been reduced. In that respect, it’s a bit like car dealers who are desperate to shift stock before ordering any more. There is also mounting evidence of the other point I made – that users were now more interested in getting a better carrier deal than in a new phone. Indeed, the move by subscribers towards more data use – eg via dongles and smartphones – is also dramatically affecting the conventional mobile handset makers.
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