Telecom & Wireless

Sony Ericsson: Global Handset Sales Disaster (NOK)(MOT)(AAPL)(PALM)

bear18Based on recent data on handset sales from research groups, Motorola (MOT), and Nokia (NOK) reinforced their forecasts that global cellphone demand could drop modestly this year

It would be the first time that has happened in over a decade. But, the drop was not seen as being catastrophic.

The latest figures from Sony Ericsson, the fourth largest supplier of handsets, indicate the sales of cellphones and smart phones are falling off a cliff.

Sony Ericssson surprised the market by saying it would only ship 14 million units this month. According to Reuters, some analysts had expected shipments of 21 million.

The handset company may be poorly positioned.  Many of its products are outdated, so Sony Ericsson could be losing market share. But, the information probably points to something more ominous which is that worldwide handset sales could be down well over 10% this year which should further damage earnings at weak competitors like Motorola and Palm (PALM) and dent the quarterly earnings of the stronger operators like RIM (RIMM) and Apple (AAPL).

Almost every forecast about the consumer electronics and cellphone industries pointed to a tough year, but now 2009 is shaping up to be the worst year in memory.

Douglas A. McIntyre

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