Saturday, June 07, 2008

Economic Downturn Indicator- Falling Handset Market

The economic downturn in Europe seems to be affecting at least one business that had seen unprecedented growth in the last few years.Though economists feel this phenomena is ephemeral in nature and growth would follow suit with introduction of newer handsets by the likes of Apple & Nokia this year

Economic data from France and Germany released Wednesday added to the recent depressing evidence that Europe is suffering from a deterioration in consumer sentiment and economic activity. French consumer confidence fell to its lowest level since 1987, in May, while in Germany, inflation rose and consumer sentiment also declined

Gartner latest data shows a marked slowdown in mobile phone handset sales in Western Europe; the research firm said Wednesday that total handset sales fell 16.0% in the region in the first quarter of 2008, from the first quarter of 2007, marking the first decline there since Gartner began tracking the mobile devices market in 2001. Strong sales in emerging markets meant global demand rose slightly

I think handset makers like Nokia or Apple is better placed to handle this downturn compared to Motorola which has failed to evoke any market sentiments due to its lack of innovation in recent times.Is this falling demand an indicator of worsening economic environment in Europe? Are we seeing a global recession with America leading the way?Only time would answer this.As Baary Asmus once said 'Economists are pessimists.They have predicted 8 of the last 3 depressions'