World's Mobile Phone Production in 2001 Faces Significant Slowdown: Survey
May 9, 2001 (TOKYO) -- Global production of mobile phones in 2000 was 427.12 million units, up 54 percent from the previous year, Nikkei Market Access reported recently.
This proved sustained high growth in production, though not as favorable as the 77 percent recorded in 1999.
For 2001, however, Nikkei Market Access predicted the production of 471.32 million units, or a 10 percent growth rate, from the previous year. A further decline may be reported if the economy breaks down in the U.S. and European markets.
At the beginning of 2000, large demand for mobile phones was expected to reach 600 million units, and there were serious shortages in component parts. But the situation developed unexpectedly in the summer of 2000. The overproduction and slackened demand in these markets forced manufacturers to adjust inventory. Compared with the same quarter a year ago, the first quarter of 2000 enjoyed a high growth rate of 71 percent. Then the figure dropped to 62 percent, 54 percent, and finally to 38 percent or 117.54 million units.
The continuing sluggish demand for mobile phones since the beginning of 2001 in the U.S. and European markets resulted in the reduction of production. During the first quarter of 2001, the production growth was 6 percent or 97.78 million in terms of units. This tendency continued in April. The price hike in prepaid mobile phones, which are mainstream items in Europe, must be a major factor in lowering future production scale. Mobile phone manufacturers and parts suppliers are expecting the business to recover in the latter half of 2001.
Economic performance in mobile phone production largely depends on the business conditions in the United States and Europe, but it also depends on the performance of cellular phone service providers.
In Europe, the General Packet Radio Service will start full scale in the fall of 2001. One of the major cellular phone service providers, British Vodafone Group, said in its business plan released last March that it had learned from the Japanese market that success of the GPRS would require better handsets. A rapid business recovery in late 2001 can be expected if the supply of newer handsets works synergistically with the new services, as the two sides have worked cooperatively in the Japanese market. In other words, without the supply of better service and newer contents, the production of cellular phones may level off.
Graph: Worldwide production of mobile phone handsets
Unit = million
*Figures for Q2, 2001 and onwards are estimates.
Survey by Nikkei Market Access
(Ken Nakamura, Nikkei Market Access) |
