Fri, 09 May 2003

Cell phone makers expect healthy sales in 2003

The Jakarta Post, Jakarta

The expected slowdown in domestic consumption due to economic uncertainties both at home and overseas will have little impact on the sales of cellular phones this year, industry executives said on Thursday.

"I acknowledge that the purchasing power (of consumers) has been sliding a bit, but it only has little effect to our sales projection," said Lee Khang Hyun, managing director of PT Samsung Electronics Indonesia, the second largest cellular phone maker in this country after Nokia.

Samsung had initially projected this year's sales to reach 3.5 million units, higher than 3 million for last year.

"But because there is a slight slowdown, we have revised downward our projection by 5 percent," Lee said.

He added that the outbreak of Severe Acute Respiratory Syndrome (SARS) in the region would not affect the sales of handsets here because Indonesia so far had been relatively free from the outbreak.

But as the SARS outbreak is affecting key economies in the Asian region, and at the same time the U.S. and Japan economies remain in the doldrums, the Indonesian economy would also be affected with exports and investments, are likely to remain mild. This gloomy outlook had affected business and consumer confidence here. Bank Indonesia said recently that domestic consumption, which has been the main driver of economic growth in the past couple of years, had started to slowdown in the first quarter of this year as slowing exports and investments are starting to affect income.

PT Dian Graha Elektrika, a company which markets Siemens phone products in Indonesia, is also of the opinion that sales this year would remain healthy.

Company product manager Indra Gunawan said that the above uncertainties would only have little effect on sales this year.

He said that the Indonesian market still offer great opportunities to sell cellular phones because of its relatively low penetration ratio or about 5 percent.

A market is saturated when the penetration has reached 60-70 percent of the population like in Europe.