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Electronics Production | April 15, 2010

EMS & ODM phone makers face problems in 2010

The Top10 CM companies—EMS and ODM alike—will probably run into some difficulties in 2010. This coming after a even more difficult year for most of them, states market researcher iSuppli.

Overall figures for the Top10 EMS and ODM Overall—in terms of shipment—will rise this year by 3.4% to reach 204.2 million units (2009: 197.5 million) states senior EMS & ODM analyst Jeffrey Wu. “The relatively flat growth anticipated in 2010 by the top contract manufacturers for wireless handsets is unimpressive when juxtaposed against the steep 30% plunge recorded by the group last year,” Mr Wu said. Depressed situation remains for the year Wireless handset contract manufacturers will see a 'carryover' from the difficulties experienced in 2009. Most companies adjusted manufacturing as well as outsourcing strategies—thus also putting a strain on MS and ODM capacities. "Prospects remain gloomy in 2010 for the group", Jeffrey Wu continued. Nonetheless, the overall wireless handset market will bounce back this year, not only growing 12.8% to 1.5 billion units, but also expanding at a CAGR of 6.8% from 2009 to 2014—suggesting that recovery could be around the corner even for the Top10, the .market researcher continues in a press release. Debilitating setbacks in 2009 pummel contract manufacturers Companies that saw their shipments effectively halved in 2009 were e.g. Foxconn, Flextronics, Compal, Arima or Elcoteq. Mr Wu stated in a final observation that "while expanding into manufacturing for the smart-phone segment allowed big-name contract manufacturers to obtain new orders from Tier 2 OEMs, those gains could not offset the larger losses that slipped away from the pullback of bigger customers such as Nokia and Sony Ericsson."
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