Europe’s beleaguered telecoms equipment and handset vendors are forecast to report minor improvements in their forthcoming second-quarter results, reports Dow Jones Newswires. Of the three major kit vendors in Europe, analysts expect Sweden’s Ericsson to fare best, helped in part by the weak Swedish krona and new managed service contracts (most notably the recent deal with US operator Sprint Nextel). Meanwhile, Alcatel-Lucent is expected to post a narrowing loss on the back of improved US sales and ongoing cost cutting, while Nokia Siemens Networks is forecast to be close to break-even after posting weak sales and an operating loss in 1Q09. However, the report notes that demand for network equipment is expected to remain challenging, especially in mature markets. Demand is expected to remain healthy in major markets such as China, though the European firms will face fierce competition here from local rivals such as Huawei and ZTE, the report says.
On the handset side, the report notes that market-leader Nokia forecast increasing market share and flat or slightly higher industry volumes in 2Q09 compared with 1Q09, but kept its prediction of a 10 percent drop in handset market volumes in 2009 compared to last year. Rival Sony Ericsson, which has predicted a similar decline in full-year volumes, is expected to report ongoing falling sales and market share in Q209, partly due to its exposure to the weakening mid-end segment. However, the firm is forecast to report a smaller loss in the quarter compared to 1Q09 and is planning to launch a series of high-end phones in 4Q09, which it hopes will lift sales.