Sunday, October 19, 2008

Demand for high-end handsets falling

Global handset vendors are lowering their shipments goals for high-end handset and smartphones in the fourth quarter and and related chip suppliers such as Texas Instruments (TI), Qualcomm, Infineon Technologies, Broadcom and ST-NXP Wireless are the first to fell the impact, according to industry players. Only MediaTek is being temporarily buffered by demand from the China market.

The conservative fourth-quarter outlook of handset vendors is as expected since consumers have tightened budgets for high price products. Order volumes for high-end handsets and smartphones have declined week by week since the last week of September, commented the sources.

Actually, most Taiwan and overseas handset chip suppliers still believe demand for the fourth quarter is likely to represent growth from the third quarter since inventory levels in the supply chain have been almost cleared. Demand for mid-range and low-end handsets in particular is expected to see double-digit growth while high-end handset demand will stay flat or decline slightly.

Handset chip suppliers have forecast that peak season effects should not be too strong in the fourth quarter based on current order visibility. However, customers are conservative but not pessimistic. But if sales are not satisfactory or the global economy worsens, handset vendors will cut orders again, pulling down demand in the fourth quarter even further.

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