Nokia (NYSE: NOK) has come out with its handset sales forecast for 2008. Since it has almost 40% of the global market, its prediction is closely watched. For 2008, it believes that total sales of cell phones will only rise 10%. According to Bloomberg "Nokia said there will be an estimated 4 billion handset users by 2009."
Ten percent growth would be slower than the handset market was in 2007, and while Nokia may prosper because its piece of the business is so big, the news could be very bad for Motorola (NYSE: MOT). With Samsung and Sony-Ericsson getting larger and larger slices of worldwide sales, Motorola either has to claw some of that back, or count on a rapidly rising market to help the entire industry. It now appears that industry growth will not be the answer for the US company.
The other piece of bad news from Nokia is that revenue-per-handset will keep falling as more and more phones are sold in emerging markets. That means that margins will be pressured, another negative for Mototola.
If the Nokia forecasts are right, a turnaround at Motorola just got much harder.
Douglas A. McIntyre is an editor at 247wallst.com.
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