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Handset ODMs, OEMs brace for challenging 2010

Posted: 16 Apr 2010 ?? ?Print Version ?Bookmark and Share

Keywords:cellphone contact manufacturer? handset? wireless?

iSuppli Corp. warns the top cellphone contact manufacturers for a difficult 2010 following a year that upended their longstanding business models and dealt them unprecedented losses.

Overall cellphone shipments for the top 10 ODM and EMS providers will rise by 3.4 percent to 204.2 million units in 2010, up from 197.5 million in 2009, said Jeffrey Wu, senior analyst for EMS and ODM at iSuppli.

However, viewed from the perspective of an industry accustomed to double-digit growth, the slight increase is no cause for celebration, Wu noted.

"The relatively flat growth anticipated in 2010 by the top contract manufacturers for wireless handsets is unimpressive when juxtaposed against the steep 30 percent plunge recorded by the group last year," Wu said.

At that time, shipment levels fell from 280.9 million units in 2008, iSuppli figures show.

Sluggish market
The persisting challenges for the wireless handset contract manufacturers represent a carryover of the upheavals in 2009, when a fall in the global wireless handset market forced key strategic shifts throughout the industry supply chain, Wu said.

Responding to reduced demand, many mobile handset firms adjusted their overall manufacturing and outsourcing strategies, in the process impacting ODMs and EMS providers alike. As such, prospects remain gloomy in 2010 for the group, Wu noted.

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