Investment banking firm UBS upped its handset sales forecasts due to what the firm said was a better-than-expected first half for the wireless industry. The firm is the latest to increase its expectations for the seemingly unstoppable mobile-phone industry.
“After stronger-than-expected volume growth in the first half of 2005, we recently upgraded our global handset forecasts from 724 million to 762 million for 2005 and from 785 million to 822 million for 2006,” wrote Jeffrey Schlesinger of UBS in a note to investors. The firm does business with a variety of handset suppliers. “As most of the upside has been driven by higher new subscribers in emerging markets, we continue to believe the volume outlook for the next few years is robust, but that there could be some additional pressure on average selling prices and margins.”
UBS echoed similar points made by other firms in noting that only the largest handset players will be able to take advantage of the market. The firm predicted continued consolidation within the industry as pricing pressures increase, and said Nokia Corp. and Motorola Inc. are best positioned to take advantage of the market. Indeed, the firm also upped its sales and earnings forecasts for Motorola following the company’s solid second-quarter performance.
As for handset sales, UBS said demand is solid throughout Europe, the United States, Asia and the rest of the world. The firm predicts fully 69 percent of all phones sold this year will be GSM devices, while only 21 percent will be CDMA units. UBS said 6 percent would be W-CDMA phones.
