EL SEGUNDO, CA – Nokia’s decision to move production in-house will rob the EMS industry of more than $5 billion in revenues, according to iSuppli.

The move also portends overcapacity, headcount reductions and, “obviously, more problems,” says iSuppli principal analyst Adam Pick. 

In light of Nokia’s decision, iSuppli said it would downgrade its current forecast, which calls for the EMS/ODM market to contract 9.9% in 2009 to $270.8 billion. The company did not provide revised numbers. 

As reported by CIRCUITS ASSEMBLY, Nokia this week said has stopped using contract electronics manufacturers for board assembly, citing weak global demand for mobile devices. 

“Amid the global economic recession and slowing sales of mobile handsets, Nokia in recent months had begun the process of shifting some assembly operations back inside the company,” said Pick. “This announcement clearly illustrates just how severe the situation in the mobile handset market really is.” 

In 2008 Nokia outsourced approximately 17% of the manufacturing volume of its mobile phone engines, which include the phone and software that enable its basic operations, to the likes of Foxconn, BYD, Elcoteq and Jabil Circuit.

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