Over the next couple of weeks, the financial results of handset-makers are expected to show that there’s an increasing global demand for cellphones for the first time since the recession.
Based on a Reuters poll, analysts are estimating that in 2010 the cellphone market will grow by 9.3 percent: “It will be the first quarter of growth since third quarter 2008 and it should formally signal the end of the global handset recession,” Strategy Analytics’ Neil Mawston told Reuters (NYSE: TRI).
The next two weeks will be an indication on how well things are going: Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) will report its financial results on Jan 22., Apple (NSDQ: AAPL) will report on Jan 25; LG (SEO: 066570) on Jan. 27; Nokia (NYSE: NOK) and Motorola (NYSE: MOT) on Jan 28 and Samsung on Jan. 29.
Here’s a snapshot of expectations based on the Reuters poll:
– HTC: Already, the Taiwanese-based HTC, which makes both Windows Mobile and Android smartphones, reported Q4 results on Jan 6, which were weaker than expected. Pressure on smartphone prices were listed as one reason.
– Nokia: The largest handset maker in the world is expected to report a 27 percent drop in Q4 earnings per share, hurt by the recession, according to the Reuters poll.
– Sony Ericsson: The struggling joint venture is expected to report a steep loss for the quarter.
– Motorola: Is expected to report earnings per share rising to 7 cents a share from 1 cent a share in the previous quarter based on new handset releases. Surprisingly, that would be the highest level since it benefited from the Razr phone model.
– Apple: Analysts expect the company to sell up to 9 million iPhones in the December quarter, but question what will keep the momentum going for the company.
– Samsung: The South Korean handset maker is likely to report about a 7 percent operating profit margin in its telecom business, down from 10 percent in the third quarter. “The key in 2010 will be how to respond to Apple’s dominance in the smartphone market,” said James Song, an analyst at Daewoo Securities.
– LG: The other South Korean handset maker is expected to see its operating profit margin drop to around 2 percent in Q4 from 8.8 percent in Q3, weighed down by costs associated with beefing up its smartphone business. LG already said it sold about 33 million mobile phones in the October to December period versus 25.7 million handsets a year earlier.