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Software industry

Mobile Industry on Brink of Collapse: Frost & Sullivan Expects Turbulent 2009

Strategic Insights

— 2 min read

As the new year begins, the mobile industry is facing a bleak outlook, with several major players on the verge of financial collapse. According to Frost & Sullivan, Intel, Motorola, Sony Ericsson, Nokia, Apple, Samsung, Google, and Microsoft are all struggling to stay afloat in the face of economic turmoil. The industry's largest companies are implementing drastic measures, including job cuts and the closure of overseas offices.

Key Takeaways:

  • Intel saw an 88% drop in net income and a 19% drop in revenue in 2008, and does not expect to meet sales targets in Q1 2009.
  • Motorola announced a 51% decrease in sales year-on-year and will cut an additional 4,000 jobs and freeze salaries in 2009.
  • Sony Ericsson reported a loss of approximately USD 94 million for 2008, down from a profit of USD 1.4 billion in 2007, and will need to focus on high-end phones to remain competitive.
  • Nokia had a harsh 2008, with its sales dropping about 19% and a 69% dip in net profit, but continues to develop its Ovi platform and acquire new technologies.
  • Samsung Electronics reported a 26% drop in net profit, despite a 15% increase in revenue in 2008, and has adjusted its target shipment to zero year-on-year growth.
  • Apple succeeded in crossing the 10 billion dollar-mark in Q4 2008, but its popular 3G iPhone shipments fell from 6.9 million in Q3 2008 to 4.3 million in Q4 2008.
  • Google has felt the impact of the recession, with many expected partnerships failing to materialize, and is expected to acquire more companies in the online advertising sector this year.
  • Microsoft saw a decline in its key performance indicators in Q4 2008, and will find it difficult to profit from its new Windows Vista operating system in 2009.

Statistics:

  • Intel's net income dropped 88% in 2008.
  • Motorola's sales decreased by 51% year-on-year in 2008.
  • Sony Ericsson reported a loss of USD 94 million in 2008.
  • Nokia's sales dropped 19% in 2008, and net profit dipped 69% to €576 million in Q4.
  • Samsung's net profit dropped 26% in 2008, despite a 15% increase in revenue.
  • Apple's 3G iPhone shipments fell from 6.9 million in Q3 2008 to 4.3 million in Q4 2008.
  • Google is expected to acquire more companies in the online advertising sector in 2009.

Sources:

  • M2 PressWIRE, "Frost & Sullivan: 'Big Guns with no Bullets to Fire' - Intel, Motorola, Sony Ericsson, Nokia, Apple, Samsung, Google and Microsoft" (February 11, 2009)
  • Frost & Sullivan, "GIL 2009: Europe" (February 2009)

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