RIM joins Nokia in warning of weaker mobile market
Weakening economies are slowing sales of low- and high-end mobile phones.
Research In Motion this week lowered its revenue and profit forecasts, echoing a mid-November downgrade by Nokia.
Others are likely to follow. Gartner says year-over-year growth in the global smartphone market is the weakest since the research firm began tracking the industry. Smartphones overall will grow, but much more slowly than in the past.
RIM says it now expects Q3 revenue of $2.75 billion to $2.78 billion, instead of the $2.95 billion to $3.1 billion previously forecast. That still represents a gain of about 65% compared with the same quarter a year ago. Nevertheless, fiscal 2009 is shaping up to be a big letdown compared to RIM’s stellar fiscal ’08 numbers.
The Canadian BlackBerry maker says about one-third of the drop is due to depreciation “of certain foreign currencies relative to the U.S. dollar.” The remainder is from lower-than-estimated unit shipments, reflecting “general economic weakness” in the United States and some shifts in RIM’s product launch dates.
Barely two week ago, Finland-based Nokia projected lower-than-expected Q4 unit shipments, estimating total shipments for the fiscal year at 1.24 billion instead of 1.26 billion units. Nokia’s 2007 number was 1.14 billion units. The company said it expects Q4 revenue and profits to be “negatively impacted” but wasn’t specific. Just a month earlier, Nokia projected Q4 device shipments would be higher than its disappointing Q3 numbers.
Gartner this week says Q3 global smartphone units will be 36.5 million units, an increase of 11.5% compared with a year earlier.
In the past year, Nokia’s smartphone market share has dropped to 42.4% from 48.7%. The big gainers during that period have been Apple, whose market share exploded to 12.9% from 3.4%, and RIM, which jumped to 15.9% from 9.7%.
Global smartphone sales by operating system show Symbian (used by Nokia and others) and Windows Mobile dropping from Q3 2007 to Q3 2008. In Q3, Symbian fell to 49.8% market share, below 50% for the first time. Windows Mobile also had a negative growth rate of -3%. According to Gartner, in Q3 2008, for the first time, iPhone sales exceeded Windows Mobile device sales both in North American and worldwide.
Both Apple and RIM did especially well in North America, but with the deepening economic downturn, that seems unlikely to continue.
