2009 cell phone growth

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Analysts cut 2009 cell phone growthestimates(Reuters)

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  • Posted on Tue Oct 7, 2008 6:58PM EDT

NEWYORK(Reuters) -The global cellphone market should growatmuchslower-than-expected ratesnext year as consumers putoffbuying newdevices due to deepeningeconomicconcerns,accordingto forecasts fromanalysts.

While industry executives often say cell phones arethelastthingconsumers will give up to save money, analystsarenowcitinglengthening phone replacement cycles andweakeningeconomiesaroundthe world for their weaker sales estimates.

UBS analyst Maynard Um halved his forecast for2009globalhandsetgrowth to 3 percent from 6 percent, pointingtoparticularweaknessin Europe andNorth America.

"We continue to believe in a tight relationshipbetweenworldrealGDP and device volume growth," Um wrote in aresearchnote.

He cited UBS cutting its forecast for 2009 global gross domestic product growth to 2.2 percent from 2.8 percent for his own reduced handset estimate.

JPMorgananalyst Ehud Gelblumwasmoreoptimistic, but still cut hisexpectations for 2009handsetgrowthto 6.1 percent from 8.1percent, citing consumerreluctancetoupgrade phones, particularlyin Europe, and "moremodest" growthinChina, oneofthe fastest-expandingmobilemarkets.

HandsetmarketleaderNokia(NOK1V.HE)warnedearly last month thatthe cell phonemarket would behurt byweakeningconsumer confidence in manymarkets in 2008 andthecompany itselfwould lose market share in thethird quarter.

Um said fourth-quarter results from handsetmakerswouldlikelyshow Nokia, which commands a roughly 40 percentshareoftheglobalmarket,is not the only onesuffering.

"As we enter Q4, we believe it will becomeclearerthatmanyhandset vendors are struggling rather thanproblemsbeingspecificto Nokia," he and other UBS analysts wrote.

They pointed to Samsung Electronics Co Ltd (005930.KS),which trails only Nokia, and Motorola Inc (MOT.N), the No. 3 mobile phone maker, which has been struggling to regain its footing since the start of 2007.

"While Motorola and Samsung may gain some volume shareinQ3,webelieve the latter in particular will showpoorASP(averageselling prices) and margin trends," the UBS reportsaid.

(Editing by Andre Grenon)


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