Cellphone makers can expect poor reception in 2012

Thu Jan 19, 2012 10:58am EST
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By Tarmo Virki

(Reuters) - Cellphone makers are set to struggle with slow sales growth this year as a weaker global economy discourages consumers from replacing older handsets.

Fourth-quarter results are likely to show the slowdown under way. Apple's (AAPL.O: Quote) long-awaited iPhone 4S and Samsung Electronics' (005930.KS: Quote) new, broad offering were likely the exceptions in an otherwise lackluster Christmas holiday season.

"The blowout quarter that Apple will report will show they are still the one to beat, while in the Android (operating system) camp ... only a strong brand like Samsung can stand out," said Gartner analyst Carolina Milanesi.

Apple, ousted as the world's top smartphone maker by Samsung in the third quarter, could regain the No. 1 spot as consumers rush to buy the latest iPhone. It had been 16 months since the previous model went on sale.

Sony Ericsson kicks off the cellphone industry's reporting season on Thursday, and analysts expect it to report quarterly sales fell 6 percent from a year earlier to 10.5 million phones.

Sony agreed to buy out Ericsson's stake in the venture last October.

Taiwan's HTC (2498.TW: Quote), BlackBerry maker Research In Motion RIM.TO and Motorola Mobility (MMI.N: Quote) have warned of weak sales in the holiday season, a key period when many consumers replace their models.

PRICE EROSION   Continued...