OXFORD, United Kingdom—Despite upbeat statements from equipment manufacturers and the organizers, this year’s CeBIT exhibition would seem to have been hit with bad news, particularly for the cell-phone industry, together with a drop in the number of exhibitors.
Industry analysts used the venue to announce that, while unit sales of cell phones declined more than 3 percent in 2001—the first dip in the industry’s history—they expect manufacturers to shortly warn the market that worldwide cell-phone sales will only be around 400 million this year, less than the previous forecast of 420 million to 450 million.
Much of this weakness is, according to analysts, due to a thriving second-hand market for cell phones together with an attempt by operators to move away from recruiting prepaid customers, which entailed providing “free” handsets. Also, the uptake of General Packet Radio Service (GPRS)-enabled handsets has been much slower than anticipated, despite marketing initiatives by Scandinavian operators to provide free high-speed data access for a trial period.
Undeterred by these gloomy statements, number-two manufacturer of cell phones Motorola said it is sticking to its forecast of industry sales of at least 420 million handsets in 2002. Other developers are hoping that color screen terminals will provide the much-needed boost this year, which together with the long-awaited arrival of GPRS applications, may carry the industry through another difficult year.
