Hopefully, this will put the inventory issue to bed.....
etienglish.com
Mobile Phone Shipments Lagging Behind New Orders
By Kim Ik-jong
Friday, November 15, 2002
The supply and demand conditions in the domestic mobile phone market are aggravating. Mobile phone manufacturers, already finding it hard to ship export volumes in time due to limited supplies of parts, are now facing a sharp increase in demand. Strong demand came in much part as sales agencies rush to open service accounts before the penalty imposed on mobile telecoms operators, suspension of sales and marketing, takes effect.
Although they are having an opportunity to boost sales volumes, handset makers are struggling with production as key parts such as chips continue to run short.
The industry earlier forecasted the market to be worth around 1 million to 1.2 million units in the second half and secured parts according to the forecast. Due to aggressive opening of service accounts by sales agencies and strong demand for color and camera phones, however, sales are now reaching 1.4 to 1.5 million, putting strain on production schedules.
With the number of countries adopting cdma2000 1x standard increasing, 1x chips have become scarce and other key parts such as LCDs are also now requiring some three to six months lead time.
"We have been delivering less than 80% of the orders we received for the last two months," said an official from Samsung Electronics. "We are doing what we can do but production continues to lag behind rising supplies."
"We have received orders for some 200,000 units, but we will only be able to deliver 60% of the total unless the shortage of parts is addressed," said an official from Pantech&Curitel, which debuted new models wearing its own brand in the home market last month.
According to the industry, the shortage of supplies is likely to persist for some time because parts are expected to run short until early next year while sales increase in the year-end season.
"The ban on sales and marketing is not likely to suppress demand given the short period of the time," said a source from a handset manufacturer. "The imbalance in demand and supply, then, will continue through the year's end."
Sales agencies, on their part, are aggressively opening service accounts fearing the suspension will hit hard their bottom lines by dwindling major source of income, subscription fees.
"They are opening blank service accounts to secure sales volumes in advance so that they can lure new subscriber even during the suspension period," said sources from SK Telecom. "That's why supplies are running short despite steady demand in the market."
Under pressure from sales agencies, operators are placing orders more than necessary. "We are asking manufacturers to sell as many as they can, but supplies are still running short," said an official from an operator. "The ban on handset subsidies is also contributing to the increase in openings of service accounts." |
