Handset Makers See Robust Growth Despite Economic Worries

Strong mobile phone sales are expected by a few handset makers despite growing concerns that the U.S. economy and the price of oil will hurt consumer demand, Reuters reports. LG (SEO: 066570), the world’s fourth-largest handset maker, said earlier this week that it expects Q2 sales to jump 20 percent over the first quarter. Samsung, the second-largest handset-maker, said it expects the overall handset market to grow by 9 percent this year to hit 1.2 billion units, of which they expect to sell 200 million units, representing a 25 percent jump over 2007. Fifth-place Sony (NYSE: SNE) Ericsson (NSDQ: ERIC) said it will return to normal inventory levels after getting off to a slow start at the beginning of the year, and expects the overall market to grow by 10 percent this year. How can this be? Sony Ericsson said people are eager to replace their current handsets, and there’s signs that they are upgrading to phones with higher-end features. For instance, LG said its second-quarter sales are being driven by its Viewty touch-screen phone which sports a five-megapixel camera and also its slim slider phone called Secret, which debuted in Europe a month ago. With a current trend in replacing and upgrading phones happening in real-time, it will be interesting to see if there is corresponding jump in content consumption as people have more capable handsets.

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