The nightmare on Wall Street may become one for mobile phone makers and providers as well. The financial markets have long provided them with their most profitable customers, but with over 12,000 workers already out of a job and the possibility of tens of thousands more joining them, tough times could be on the horizon. Experts say RIM, the makers of the ultra popular Blackberry, could be especially hard hit. Palm, HTC and HP also stand to be affected.
Demand is already slowing in the U.S. due to the credit crunch and poor housing market. Cell providers have tried to compensate by offering deeper subsidies on their high end handsets, but if predictions come true, it may not be enough. RIM sold nearly 6 million Blackberries last quarter and is preparing to roll out their much anticipated Blackberry Bold, and that seems to have RIM feeling confident they can ride out the storm.
“No matter how much economic challenge there is, how many people do you know that have given up their mobile?” RIM’s co-chief executive Jim Balsille said on Thursday in Mumbai at the launch of the BlackBerry Bold smartphone in India.
He does have a point. Cell phones have gone from a luxury item to a must have for most people, and they have and will probably continue to be willing to make sacrifices to keep them. RIM’s success in expanding their popularity beyond the business world will also help them, at least for now. However, it wouldn’t be surprising if the prepaid phone industry gains a boost in sales over the next quarter.
Read [Reuters]
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