According to several media accounts, Nokia (NOK) is forecasting real trouble in the handset market both in the fourth quarter and into 2009.
According to MarketWatch,Nokia warned that industry volumes for the fourth quarter will be lower than previously expected and said next year’s sales will be down. "In the last few weeks, the global economic slowdown, combined with unprecedented currency volatility, has resulted in a sharp pull back in global consumer spending. The weaker consumer spending has impacted many industries, including the global mobile device market. The mobile device market has also been negatively impacted by the more limited availability of credit, which has limited the purchasing ability of some of our trade customers," Nokia said. Nokia still expects its market share to be at the same level or up from the third quarter.
Motorola (MOT), which is already at death’s door, is likely to be pushed into the grave by a downturn this severe. It has had four consecutive quarters of losses in the hundreds of millions of dollars. It global market share has fallen from 22% three years ago to about 13%. It has canceled the spin-out of its handset business. And, its share price is down to $4 from a high of $22 two years ago.
Motorola cannot survive a huge contraction in global cell phone sales next year.
Douglas A. McIntyre