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Trouble on Wall St. means trouble for manufacturers and carriers

Updated 4 years ago

That dude pictured above doesn’t look too happy, and who can blame him? He’s probably a tech geek, if not a Blackberry user who is sharing the worries and woes of the mobile telecommunications industry, which is heavily affected by the current economic downturn. With several banks and financial institutions being bailed out by the U.S. government, how can it not trickle down to the phone manufacturers and carriers? RIM is going to be a huge one since a big chunk of its market are the business types, and the fact that its success also depends largely on the success of Wall Street. The worst case scenario is they lose up to 40,000 subscribers — never a pretty thing. It seems tough enough for the mobile market to continue the success its seen over the past few years, but a failing economy could spell disaster. Products are being delayed, funding for R&D will likely be tight, and advertising will eventually have to suffer. Right now, the carriers have to focus on the smartphone market where they not only make a penny or two off high-end devices, but earn sustainable profits from data packages. This can almost never be good for the consumer, but I guess we’ve all gotta pay our share to keep our obsessions afloat.

Handset sales are predicted to go up 10% this year, but the majority of that will likely be from cheaper phones. Established names have struggled and, in Western Europe, sales have declined tremendously for the first half of ’08. Nokia, for example, has had a difficult time selling its high-end devices like the E-Series devices. RIM’s co-chief executive Jim Balsille says no one will ever abandon their handsets, and that’s true once you’ve grown dependent on them, but people will start making sacrifices here and there where they can, and that could hurt us all. With banks failing, the economy spoiling, and gas prices fluctuating between ridiculously high and an arm and a leg and a kidney, will you start holding off on buying those new, shiny, and pricey gadgets?