Tue, Jun 13, 2006 - Page 12 News List

Nokia, Motorola reduce orders: analyst

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Nokia Oyj and Motorola Inc, the world's two largest mobile-phone makers, have cut orders, indicating handset supply is exceeding demand, JPMorgan Chase & Co's top technology analyst Bhavin Shah said.

Nokia reduced purchases of handset displays, while Motorola cut orders of Compal Communications Inc (華寶通訊) phones last month, Shah said in Taipei last Friday. He didn't provide specifics.

Motorola's Hong Kong-based spokeswoman Mary Lamb and Nokia spokeswoman Felicia Yeo in Singapore declined to comment.

"There have been some signs of a mismatch between end demand and production," Shah said. "If that begins to emerge more," that could point to an oversupply of handsets.

The US$115 billion global handset market is increasingly becoming a gauge for consumer spending as sales of mobile phones outnumber computers.

A glut of cellphones may inflate concerns about slowing earnings growth.

Makers of chips customized for mobile phones, computers, and consumer electronics are boosting production by about 30 percent, outpacing demand growth of about 20 percent, said Shah, who attended the Computex trade show in Taipei last week.

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