Mobile-phone sales hit by economic slowdown

Kuladist Smuthcochorn, manager director of Wireless Device Supply Co Ltd (WDS), said research house GFK had already lowered its 2008 forecast for mobile-phone sales to 8.7 million units from 9 million units, due to soaring rice and oil prices.

However, the new estimate is still higher than the 8.4 million units sold last year.

In value, sales are expected to drop by 9 per cent to Bt32 billion from Bt35 billion last year, as most sales will be low-cost units in line with the decelerating economy.

 "[During the first five months], 60 per cent of our handset sales were devices below Bt3,000, while sales of those worth over Bt3,000 remain flat," Kuladist said.

WDS has been moving some 280,000 mobile phones per month since the beginning of the year. Its first-quarter revenue of Bt3 billion was down by 10 per cent from the same quarter last year. It targets annual revenue of Bt12 billion, unchanged from last year.

"People have been spending more on food and fuel. Though they still buy mobile phones, they pick up the cheap ones," he said.

WDS would adjust its strategy by focusing more on selling budget models in the second half but it would not ignore the middle and high-end market in order to maintain revenue.

Mobile phones featuring a colour screen and digital camera that are priced Bt3,000-Bt5,000 are still doing well, he added.

Kittipong Kanokvilairat, chief marketing officer of Jay Mart Co Ltd, said the retailer is targeting affluent consumers, who have been largely impervious to the soaring cost of living.

It aims for mobile-phone sales this year of 1.1 million units worth Bt6.4 billion, up from 970,000 units worth Bt5.8 billion last year.

Revenue appears to be on track as the first quarter was 10 per cent above the same quarter last year.

About 40 per cent of its mobile-phone sales are models costing over Bt8,000, 35 per cent are priced at Bt3,000-Bt8,000 and 25 per cent sell for lower than Bt3,000.

Of the 45 million mobile-phone subscribers in the country, no one wants to buy a new version that is inferior to the old one.