HELSINKI, Oct 30 (Reuters) - The world's top cellphone
makers fear further weakening demand after reporting
third-quarter growth grinding to a standstill, with only
Samsung Electronics gaining market share through price
cuts.
Although the overall market had not yet begun to
contract, growth has slowed to zero in the latest three
months from well above 10 percent in previous quarters as
handset makers feel the pinch from slowing economies and
the credit crisis.
Sales in key European markets continued to fall in the
third quarter and in recent weeks, fears over weak
Christmas sales and further waning demand next year have
continued to grow.
Some analysts forecast the cellphone market to be hit
harder next year especially in developed markets.
"Consumer demand is slowing in developed markets. I am
a little worried the Christmas sales there will be a little
bit of this and that," said eQ Bank analyst Jari Honko.
Honko said he expects volumes in Europe and North
America to continue falling next year, but growth in
emerging markets would pull the total market to a 2 percent
rise. This would be a sharp drop from the double-digit
growth seen in recent years.
Top phone maker Nokia forecast earlier this month
13.5-percent market growth in the fourth quarter, slightly
weaker than in recent years, but reassuring for investors.
Having reported annual volume growth of 27 and 21
percent for the first two quarters, Nokia managed only a
rise of 5 percent in the third quarter as sales fell in
Europe -- by more than 5 percent -- and in North America.
Even more drastically, the annual growth of LG
Electronics slowed from 54 percent in the first quarter and
45 percent in the second to just 5 percent in the third.
Motorola and Sony Ericsson have also struggled with
internal problems during the year and reported quarterly
sales at best on last year's level. Motorola's
third-quarter data is due later on Thursday.
The only vendor among top five which was able to keep
up the growth rate of the previous quarter was No 2 vendor
Samsung, but it had to aggressively cut prices during the
quarter to reach that, hurting its profit margin.
"Samsung has a clear ambition to win market share,"
said eQ's Honko.
Samsung's telecom unit operating profit margin dropped
to 7.3 percent in the quarter from 12.9 percent in the
previous quarter. Also Nokia and LG Electronics saw their
margins dipping, but stayed well above Samsung's level,
with 18.6 percent at Nokia and 11.5 percent at LG.
(Reporting by Tarmo Virki; Editing by Mike Nesbit)
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