News
EL SEGUNDO, CA – In the third quarter of 2008, the mobile-device market contracted slightly, ending with 316.7 million units, down 1.1% sequentially, says iSuppli Corp. Mobile handsets, which account for the vast majority of this segment, will achieve shipments of 311 million units, down 0.3% compared to the second quarter.
The once almost unstoppable growth in mobile-device shipments and revenues is coming to a screeching halt as wireless subscribers around the globe extend the lifecycles of their existing devices in response to difficult economic conditions, says iSuppli.
A check in the channel shows manufacturers are being conservative in their sourcing and component procurement activities; they are making efforts to reduce inventory to maintain lean and efficient operations, the firm notes.
iSuppli has lowered its forecast of global mobile-device shipment growth to 8.9% in 2008, down from 10.4%, which will end the year at 1.287 billion units.
“The outlook for 2009 is even more gloomy than for 2008,” observed Tina Teng, senior analyst, wireless communications, for iSuppli. “With the United States, Europe and Japan entering recessions, economic uncertainty and waves of layoffs mean consumers are likely to spend less on mobile products.”
Shipments in 2009 are expected to decline 5.6% to 1.215 billion units.
With more than three billion subscribers worldwide, the growth of the mobile-device market has been driven by upgrade purchases of existing customers, Teng noted.
“While new subscriber additions are continuing at a healthy pace and are poised to grow by 563.9 million in 2008 and by 506.5 million in 2009, an overwhelming majority of the new subscribers are coming from the rural areas of emerging regions,” Teng said. “These subscribers primarily are purchasers of low-cost, entry-level handsets. However, the pricier feature-phone and smart-phone market segments are driven by existing subscribers who are upgrading their mobile devices to take advantage of new features and advanced data services. As the economic climate deteriorates, these customers are delaying their purchases.”
With the penetration of mobile handsets in emerging markets rising rapidly during the past few years, upgrades have grown to account for more than 50% of total mobile-device shipments in 2008. Because of this, mobile-device shipment growth has become more sensitive to the upgrade cycle, says iSuppli.
If the replacement cycle extends by 4.7 months, the mobile-device market contraction will commence. If only 16% of 2008 subscribers upgrade to a new device in 2009, it will translate into a replacement cycle extension of 19 months. Under these circumstances, the outcome will be that mobile-device shipment volume will be reduced to 1.3 billion units in 2008 and to 1.1 billion units in 2009, with a market contraction of 12% in 2009, according to the research firm.
However, at this time, iSuppli is not going that far, revising its 2009 mobile-device forecast – including both mobile handsets and external modems – to 1.2 billion units, down from 1.4 billion previously, with mobile handsets accounting for nearly all shipments in 2009. iSuppli estimates, in the mobile-device market, the replacement cycle will extend by 10.7 months in 2009 with a replacement rate of 18.1%.
Based on iSuppli's preliminary estimate, on top of the average selling price erosion and higher mix of entry-level handsets in mobile devices, it is likely industry revenue will suffer a 10.7% decline in 2009.
iSuppli believes mobile-device shipments in 2009 will contract by 5.6%. By the end of 2010, the mobile-device market should show signs of a revival with a year-over-year growth rate of 3.1%.
Despite the economic meltdown and the rising unemployment rate, India will have added 9 million new wireless subscribers per month in 2008, while China's subscriber base will have expanded at a rate of 7 million new subscribers annually. First-time buyers in the emerging market are still going strong and will represent 42% of the mobile-device market in 2009.
DENVER, CO – Ron Huston, former owner and CEO of Advanced Circuits, has joined Advanced Assembly as director of marketing.
Huston will focus on sales to engineers who need surface mount parts placed on PCBs in fewer than two days.
The Denver-based provider of SMT services said its staff grew 51% in 2008.
SAN JOSE -- Flextronics will lay off up to 30% of its staff in Beijing, according to local media reports.
The EMS company will also close its Beijing R&D center, China Tech News today reported, quoting an unnamed company source.
TOKYO – Equipment sales this year are expected to be $30.91 billion, says SEMI.
The company’s forecast indicates, following 5.7% market growth in 2007, the equipment market will decline almost 28% in 2008.
HELSINKI – Elektrobit will lay off 170 staff worldwide as part of a restructuring plan aimed at saying €10 million per year.
EB will also cut certain programs and reduce some subcontracting.
The measures come on the heels of an October announcement in which the company said it would cut 42 jobs as part of a plan to cut costs by €30 million a year.
During the second half of 2008, EB will take up to €5 million in nonrecurring restructuring costs and write-offs related to the layoffs.
LOS ALTOS, CA – Despite deteriorating economic conditions, third-quarter global PC shipments grew 14.8% year-over-year. The double-digit unit gains were created by strong demand in developing countries and the continuing transition to laptop computers, says Henderson Ventures.
However, the full force of the credit crunch is expected to pound down fourth-quarter demand worldwide. As a result, global unit shipments growth will decelerate from 14.7% last year to 10.8% in 2008, says the firm.
Severe regional recessions will constrain PC markets to only a 3.8% gain in 2009, Henderson adds. Without WiMax, and netbooks, unit growth rates would be negative during 2009.
An economic rebound, along with reinvigorated replacement cycles and technological advancements such as USB 3.0, will help create a 13.6% jump in PC shipments during 2010.
The combination of small unit PC gains, along with declining average sale prices, will create a financial downdraft for computer equipment manufacturers next year. World production values will fall 2.3% after a 5.2% gain this year, says Henderson.
With the exception of China, all the major computer-manufacturing regions will experience negative growth in 2009. US output will fall 6.2% next year, followed by a muted 4.1% advance in 2010.
China will achieve only a 2.2% gain in 2009, followed by a 12.7% burst in 2010, says the research firm.
TEMPE, AZ – Economic activity in the manufacturing sector failed to grow in November for the fourth consecutive month, and the overall economy contracted for the second consecutive month, says the Institute for Supply Management.
The November PMI registered 36.2%, down 2.7 points. New orders fell 4.3 percentage points to 27.9%. Production was 31.5%, down from 34.1%, while inventories dropped 5.2 points to 39.1%. Customer inventories remained at 55%, and the backlog of orders fell 2.5 points to 27%. A reading above 50% generally indicates growth.
"When comparing November to October, the PMI indicates a continuing rapid rate of contraction in manufacturing. New orders have contracted for 12 consecutive months, and are at the lowest level since June 1980 when the index registered 24.2%. Order backlogs have fallen to the lowest level since ISM began tracking the backlog of orders index in January 1993. The prices index at 25.5% indicates commodity prices continue to decline at a rapid rate. This is the lowest reading for the index since May 1949 when it registered 20.1%," said ISM spokesperson Norbert J. Ore.
The November PMI registered 36.2%, down 2.7 points. New orders fell 4.3 percentage points to 27.9%. Production was 31.5%, down from 34.1%, while inventories dropped 5.2 points to 39.1%. Customer inventories remained at 55%, and the backlog of orders fell 2.5 points to 27%. A reading above 50% generally indicates growth.
"When comparing November to October, the PMI indicates a continuing rapid rate of contraction in manufacturing. New orders have contracted for 12 consecutive months, and are at the lowest level since June 1980 when the index registered 24.2%. Order backlogs have fallen to the lowest level since ISM began tracking the backlog of orders index in January 1993. The prices index at 25.5% indicates commodity prices continue to decline at a rapid rate. This is the lowest reading for the index since May 1949 when it registered 20.1%," said ISM spokesperson Norbert J. Ore.
SAN JOSE, CA – Worldwide sales of semiconductors declined 2.4% in October to $22.5 billion compared to the same month last year, says the Semiconductor Industry Association. October sales were down 2.1% sequentially.
TOKYO – AOI OEM Saki Corp. has signed a sale and purchase agreement with Schmidt Electronics Group to acquire a certain percentage stake in MacroScience Technology. No financial terms were disclosed.
BUDAPEST – Foxconn plans to lay off 1,500 workers in Hungary, more than half its workforce there, as a result of slipping orders, according to published reports.
After layoffs in Komarom and Debrecen, the firm will employ about 1,150 people near Budapest, Reuters said.
The economy in Hungary is expected to hit a recession in 2009 on dropping export demand and domestic consumption; the government predicts contraction for up to a year-and-a-half, according to reports.
Analysts say the country's 7.7% unemployment rate from August to October could reach more than 10% by the middle of 2009.
After layoffs in Komarom and Debrecen, the firm will employ about 1,150 people near Budapest, Reuters said.
The economy in Hungary is expected to hit a recession in 2009 on dropping export demand and domestic consumption; the government predicts contraction for up to a year-and-a-half, according to reports.
Analysts say the country's 7.7% unemployment rate from August to October could reach more than 10% by the middle of 2009.
ST. PETERSBURG, FL -- The enforcement division of the Securities and Exchange Commission has notified Jabil Circuit it recommends no action on Jabil's historical stock option grant practices.
Following a roughly six-month investigation, the SEC Division of Enforcement issued a letter to Jabil advising the SEC not to take any enforcement action.
Following a roughly six-month investigation, the SEC Division of Enforcement issued a letter to Jabil advising the SEC not to take any enforcement action.
YOUNGSVILLE, OH -- SMT Resource Group, a seller of refurbished equipment, this week filed for Chapter 11
bankruptcy protection.
The company had recently moved from Texas to a former Flextronics site in Youngsville, where it leases 60,000 sq. ft.
The company had recently moved from Texas to a former Flextronics site in Youngsville, where it leases 60,000 sq. ft.
