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Cellphone revenue, shipments expected to beat projections

Mobile phone shipments worldwide will probably increase more than expected this year, fueled by sales of Nokia Oyj's handsets and demand from China and India, JPMorgan Chase & Co said.

Shipments will rise 20 percent to 1.2 billion units, compared with a previous estimate for 1.17 billion, Bhavin Shah, head of JPMorgan's Asia Pacific technology research team, wrote in a report yesterday.

Next year, shipments will probably climb 15 percent, Shah said.

WINNERS

Industry leader Nokia and Asia's biggest producer, Samsung Electronics Co, reported mobile phone earnings that beat analyst estimates this month.

China will extend its lead as the biggest market for handsets after shipments surge 30 percent this year, the report said.

"This shows those who get customers in emerging markets win," said Robyn Hsu, who counts shares of mobile-phone chipmaker Mediatek Inc (聯發科技) amid the US$152 million he helps manage at Truswell Securities Investment Trust Co (富鼎投信).

"Low-cost mobile phones will continue to drive market growth as demand in mature markets like the US slows," Hsu said.

Espoo, Finland-based Nokia, which this week reported an 85 percent surge in profit that beat analyst estimates, will probably sell 36.1 percent of the world's mobile phones this year, compared with 34.4 percent last year, Shah said.

Samsung, LG Electronics Inc and Sony Ericsson Mobile Communications Ltd will also gain market share this year, the report SAID.

Motorola Inc's share of the market will tumble to 13.3 percent this year from 21.5 percent last year, the only market share drop among the top five vendors, the report said.

REVENUES

Industry revenue will probably rise 8 percent this year, slower than the 20 percent increase in shipments, as the average price of handsets falls 10 percent to US$122, Shah said.

Mediatek, based in Hsinchu, will probably benefit from the surge in Chinese demand, Shah said.

Shipments of the company's baseband component, used in 19 of the 20 largest Chinese handset brands, will probably jump to 173 million units this year, the report said.

"Checks in the Asian supply chain suggest strong trends for Nokia and Mediatek, but not many signs of a turnaround for Motorola," the report said.

Shah, who runs a 25-member team that covers almost 140 stocks, has been ranked as the top technology analyst in polls conducted by Institutional Investor magazine and Asiamoney since 1999, his profile in JPMorgan's August issue of the company's equity research directory showed.
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