Mobile phone handset makers and network equipment manufacturers are gathering in Barcelona this week with contrasting stories to tell about revenues for the year ahead.
At the Mobile World Congress, the industry’s main trade fair, the handset makers say they are looking forward to revenue growth in 2010, on the back of rising handset unit sales. Last year, the total number of handsets sold fell compared with 2008, as consumers bought fewer phones amid the recession.
The network equipment makers, however, are braced for a second successive year of sales declines and say 2010 is likely to be worse than 2009. This is because many operators did not start to cut their capital spending until the second half of last year – leaving some to make further reductions this year.
But while the handset makers are hoping improved consumer confidence will translate into improving sales, many are still grappling with major technology changes that are shaking up the established order.
Credit Suisse analysts estimate that Apple will overtake Nokia this year by claiming the biggest share of the handset makers’ operating profits pool. Apple only started making mobiles in 2007, but its iPhone has set a new standard in touchscreen smartphones that Nokia and other traditional handset makers have yet to better.
Nokia, the world’s largest mobile maker, is not unveiling any new handsets at the Mobile World Congress for the first time in more than 10 years.
This move may reflect the company’s need to overhaul its Symbian operating system for mobiles, following criticism that it is no match for equivalents from Apple and Google.
However, Nokia will use the Barcelona event to give an update on its partnership with Intel. The companies are collaborating on a mobile device that could be midway between a smartphone and a netbook.
Google’s Android operating system will feature prominently this week. Sony Ericsson and Motorola are unveiling new phones using Android, which are particularly important to both companies given that they are in turnround mode.
Meanwhile, the network equipment manufacturers are expected to put a brave face on falling sales in 2010 by pointing to increasing orders for equipment that is based on fourth-generation wireless technology called LTE, which enables faster web surfing on handsets.
Ericsson and Huawei, the Chinese equipment maker, look better placed to cope this year than Alcatel-Lucent and Nokia Siemens Networks, which are both running up losses.