Zeev's Turnips Patch-No Politics (ZEEV)

[AKvetch]

SARS fears to impact Nokia, Motorola, Qualcomm, says report

SAN DIEGO -- The sudden outbreak of severe acute respiratory syndrome (SARS) is having a major impact on the retail markets in Greater China--a series of events that will hurt the bottom lines of Motorola, Nokia, Qualcomm and other electronic companies, according to a report from the The San Diego Union Tribune.

The report indicates that consumers in mainland China are staying home rather than going out and spending money on electronic goods amid fears of SARS. China, the epicenter of SARS, has reported 6,727 “probable” SARS cases with 407 deaths due to the epidemic.

As a result, weekly sales of cellular phones fell 40 percent in the last week of April in China alone, according to the report, which cited data from JP Morgan. And China Unicom, which is deploying a CDMA network in China based on Qualcomm Inc.'s technology, claims its subscriber numbers have fallen short of expectations, the report said.

That's a bad sign for the wireless industry, given that China is the world's largest market for cellular phones. The nation is also expected to overtake Japan's as the world's second largest PC market, next to the United States.

More importantly, China is expected to be the engine of economic growth for the electronics industry in 2003 and beyond. But the impact of SARS is already taking a bite out of the nation's economy. So far, China faces a total economic loss of more than $2 billion due to SARS, according to the report, which cited data from WSI Research.

SARS is not only hurting China's electronics sector but also its manufacturing sector. Many hi-tech companies are reportedly considering a plan to move their production sites from China to Eastern Europe and Mexico, the report said.

China is not alone. Hong Kong and Taiwan face similar problems. In fact, the retail sector in Taiwan has also dried up as consumers have opted to stay home.

Semiconductor Business News
(05/11/03 04:03 p.m. EST)

http://www.siliconstrategies.com/story/OEG20030511S0001