Smartphones boom though the cell phone market losses pace

By siliconindia   |   Monday, 15 November 2010, 18:08 IST
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Bangalore: Due to economic growth and component shortages in the current quarter, the cell phone market lost pace and slowed down to a rate of 13 percent from 16 percent. There are signs that the rate will further drop to 10 percent in the fourth quarter. Handset makers like Nokia and Sony Ericsson were very disappointed as the component shortages dragged their sales below expectatiosns. CCS Insight analyst Geoff Blaber said "We expect supply to remain a problem in the fourth quarter as an abundance of smartphones and a swathe of tablet devices increases pressure on component supply." Sony Ericsson and Motorola made the best profits after shifting to smartphones but their total sales volume was hit sharply a year ago as they sold cheaper models. LG and Nokia, both have struggled to keep up with smaller rivals in the fatter-margin business of selling more advanced cellphones. "Handset volumes from many leading names have showed surprising softness - Nokia, LG and Sony Ericsson all coming up short of consensus,"said Tero Kuittinen, analyst at MKM Partners. "Many of these vendors have blamed component shortages for volume lightness, but some questions persist over whether the brand-name phone manufacturers might be losing share to no-name low-end vendors," he said.