Tuesday February 19, 9:55 am Eastern Time
Motorola Sees Drop in Networks Market
CANNES, France (Reuters) - Motorola, the world's second-largest cellphone maker, on Tuesday forecast that the mobile networks equipment market would shrink four percent this year although China would show healthy growth.
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Motorola and Ericsson, the world's largest maker of mobile networks, had said last month sales of mobile infrastructure equipment could fall by as much as 10 percent in 2002 as cash-strapped carriers delay purchases amid the global economic downturn.
Telecoms operators, especially in Europe, are also financially strained after spending billions of dollars on buying licenses to run third-generation services, which are being designed to provide mobile users with fast Internet access, video and picture messaging.
``Both the economic situation and the 3G situation lead us to believe the market will shrink four percent this year,'' Adrian Nemcek, president of Motorola's global telecoms solutions sector, told Reuters in an interview.
Sales in the mobile networks market also declined last year, with Ericsson's falling 2.4 percent from 2000.
Nemcek said he was puzzled by forecasts from Finnish rival Nokia, which said last month it expected the market for wireless networks to be flat in 2002 year-on-year.
``There are no signs of that,'' Nemcek said, but added the market could get a lift if the global economy were to stage a rebound in late 2002.
``China will continue to grow even if there's slower subscriber growth there... We still expect very good growth there,'' he said, adding this would be supported by growth in China's gross domestic product this year.
China, which has overtaken the United States as the largest mobile phone market, has become key for wireless equipment makers due to falling demand in Europe and the U.S. after years of runaway growth.
Nemcek also said he did not expect 3G to commercially take off until 2004 -- a year later than Nokia's forecast.
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