Mobile Phone Supplies Coming Up Short
Dec 5, 2003
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Recent reports are showing that mobile phones are flying off retail shelves before Christmas, and sales are heading for record highs this year as the global economy recovers and low-priced models go on the market.

However, reports are also showing that handset makers cannot keep up with demand.

In their efforts to avoid the dreaded mistake of 2001, when they miscalculated demand to the tune of 100 million units, phone producers are cautious and have run short of components.

The result is that demand is outstripping supply in most regions of the world, from emerging markets in Russia and India to saturated markets of the United States, Europe, and Japan, where consumers are swapping old models for fancy new ones.

"Gaps in supply first became evident in August and have become more acute in the last two to three weeks," said a spokesman for Komsa, which supplies some 6,000 mobile phone shops in Germany as well as a few in The Netherlands and Poland.

Kenneth Jonsson, managing director for Nokia Mobile Phones in Russia and CIS countries, singled out its new and low-priced 1100 and 2300 models. "Nokia unexpectedly needs to increase deliveries of these phones to Russia," he said.

France's mobile operator SFR has said that it was running out of stock with its Live! series of picture phones.

Siemens CEO Heinrich von Pierer said his firm had practically sold out. "We didn't expect (demand) would be so strong," he said.

Mobile phones have never been so inexpensive or more powerful. European consumers can pick from a dozen different entry models for well below 100 euros (U.S. $120.60). A Siemens handset with color display can be had for as little as 50 euros if bought with a pre-pay package. That is 25 euros less than just 6 to 12 months ago.

Market research group Strategy Analytics said that just 2 weeks ago, it internally raised its full-year global sales targets to 504 million units, from the already bullish 492 million. That is a massive leap from the 429 million units of 2002 and the first significant growth since 2000. (Reuters)

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