Street Fallout a Silver Lining for Wireless Market

While shaky economics isn't good, carriers and handset makers cling to new business opportunities.
Posted September 19, 2008
By

Judy Mottl


While this week's financial fallout from Wall Street will affect corporate IT spend, high-end smartphone makers won't experience any great pains given mobile handsets are critical business devices and market shakeup could even bring new business opportunities.

"Overall there will not be a big impact, though any time the economy is tough technology will experience somewhat of a hit," said Ryan Reith, an analyst at Worldwide Mobile Phone Tracker, IDC, told InternetNews.com. "But we don't foresee a slowdown in the high-end device market."

Such predictions aren't surprising given the strength of the mobile device industry and wireless data services markets. Nearly every vendor boasted good financials so far this year, with some celebrating double-digit growth in the first two quarters despite increasing competition both on the services and device landscapes.

The big reason is that mobile devices are spurring productivity, which do impact the bottom line, according to pundits, and so companies look to make budget and tech cuts elsewhere.

"When the economy environment gets tough, corporations look at limiting costs such as travel and IT," Carolina Milanesi, an analyst at Gartner covering mobile devices, told InternetNews.com.

"However, for many enterprises a BlackBerry or a smartphone have helped improve productivity and have become indispensable," Milanesi said. "They might not upgrade to the latest device but they will more than likely keep the service."

While Research In Motion (NASDAQ: RIMM), Verizon Wireless and AT&T (NYSE: T) declined comment about current stock market news, executives are indicating the fallout could be rosier than most expect.

Verizon Wireless' CEO told investors at a Goldman Sachs Communacopia XVII Conference today that the financial events could have a positive impact.

"The consolidation in financial services will create some [wireless] opportunities," said Denny Strigl, president and COO at Verizon Wireless.

Strigl's take is on par with Sprint CEO Dan Hesse's view, though Hesse sees another wireless market issue in play.

"The events of the last few days don't indicate a significant change, and there could be a benefit as users may keep their devices longer leading to less churn," Hesse told investors during his presentation. "Customers will still have to pay something to leave a plan so they may stay put," Hesse pointed out.

This article was first published on InternetNews.com. To read the full article, click here.






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