LONDON, February 11 /PRNewswire/ --

After a devastating end to 2008, the future is looking bleak. At the
start of 2009 the mobile industry is starting to implement strategic job cuts
and closing of overseas offices. This is just the beginning. The New Year
started with Nortel Networks filing for Chapter 11. Many companies are not
far behind. The question remains: how will some of the largest blue chip
companies fare this year? Based on recent findings, Frost & Sullivan expects
several firms to have a tough time fighting this year's projected internal
and external challenges.

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Luke Thomas, ICT Programme Manager for Frost & Sullivan states, "In these
times of economic turbulence, we expect more partnerships to forge between
firms rather than companies planning to brave the recession 'hurricane'
single handedly. Given that we are still at the tip of the iceberg as far as
the downturn is concerned, it will be interesting to see how various
companies across various industries cope with consumer slowdown. It is likely
to lead to a few players dominating the markets through a series of mergers
and acquisitions."

Intel ended 2008 with a staggering 88% drop in net income, and a 19% drop
in revenue. 2009 does not seem to hold too much promise for this company as
they did not even state a sales outlook for Q1. Instead, they announced they
are closing plants in Silicon Valley, Malaysia and the Philippines, resulting
in an estimated loss of about 5,000 to 6,000 jobs. Intel is now looking at
netbooks to save the PC market in 2009. However, if traditional laptops and
PC sales do not pick up, then low cost netbooks will eventually decrease
margins of chipset makers and device vendors. In spite of several equipment
vendors defocusing on Mobile WiMAX, Intel continues to be bullish on the
market potential for this emerging technology.

At the end of 2008, Motorola Handset Division announced a 51% decrease in
sales year-on-year and are also cutting an additional 4,000 jobs and freezing
salaries in 2009. Motorola lost its lead in technology innovation, design and
style to Apple and other new players. Razr was its last success story in
2005. Now Motorola is focusing on forging close ties with Google on the
Android operating system. It is also concentrating on the midrange handset
market.

Sony Ericsson was third in the global handset market in Q3 2008, but fell
into the fourth place in Q4. Sony Ericsson acknowledged a loss of
approximately USD 94 million for 2008, down from a profit of USD 1.4 billion
in 2007. The company's future growth looks daunting due to its high
dependence on the Western European market which is expected to experience
flat growth in 2009. Sony Ericsson will need to pull its socks up in 2009 and
focus on high-end phones to increase its margins and remain competitive with
companies such as LG, whose low-price strategy for its mobile handsets will
best combat the recession.

Even Nokia had a harsh 2008, with its sales dropping about 19% and a 69%
dip in net profit at 576 million Euro for Q4. Despite some setbacks, the
company continues to enhance its Ovi platform and recently stated that it
will acquire bit-side GmbH to strengthen and accelerate its mobile
development for Nokia Maps.

Samsung Electronics reported a full year net profit drop by 26%, despite
a 15% increase in revenue in 2008. Although Samsung had 2% growth in the
mobile handset division, its profit margin was heavily impacted due to its
low-price strategy with the average selling price of its handsets falling by
nearly 10%. Samsung believes that the global handset market will shrink by 5%
to 10% in 2009 and has adjusted its target shipment to a zero year-on-year
growth.

Apple succeeded in crossing the 10 billion dollar-mark in Q4 2008, but
its popular 3G iPhone shipments fell from 6.9 million in Q3 2008 to 4.3
million in Q4 2008. With no revolutionary product being launched at the
recent CES expo in Las Vegas, the company must make every effort possible to
come out with differentiated handset devices for various market segments in
order to retain its momentum within the mobile handset industry considering
many of its competitors have come out with several models of touch-screen
devices at much lower price points.

Forced to discontinue many of its services, Google too has felt the
impact of the recession. Many expected Google to acquire some spectrum in the
700MHz auction in the US and close the Internet advertising partnership deal
with Yahoo, however Google did not succeed. With the current consolidation in
the online advertising industry, Google is expected to acquire more companies
in this sector in 2009 so as to restore shareholders' confidence in its
growth strategy over the coming years.

Microsoft too saw a decline in its key performance indicators in Q4 2008.
Many opine that low cost netbooks will be sold in higher volumes than PCs and
laptops this year. In such a scenario, Microsoft will find it difficult to
profit from its new Windows Vista operating system as many of the notebooks
or mini-PCs currently operate on Windows XP. Perhaps the place of growth for
Microsoft will be in developing mobile applications to compete against the
likes of Apple.

"2009 will be a very difficult year for several businesses in the mobile
and wireless industry and it will be easier said than done to state that the
market will bounce back by the end of 2009 as the sheer fact is that markets
will begin to stabilize only towards the latter half of 2010 and attain
positive growth by late 2011 or early 2012," concludes Luke Thomas.

For more questions about the European Mobile and Wireless Industry please
contact Joanna Lewandowska at joanna.lewandowska@frost.com. Please include
your company name, query and contact information.

GIL 2009: Europe

Frost & Sullivan has expanded its flagship Global Congress on Corporate
Growth - GIL Global - into several major cities around the world including
London. For the first time ever in Europe, Frost & Sullivan will be hosting
the Growth, Innovation and Leadership Congress 'GIL 2009: Europe' on 19-20
May, at the Sofitel St James in London. GIL Global is the industry's only
event designed to support senior executives in their efforts to achieve
sustainable, top-line growth. To register, obtain a programme agenda, explore
sponsorship opportunities, or attend as a member of the media for GIL 2009:
Europe, please contact Chiara Carella, Head of Corporate Communications for
Frost & Sullivan in Europe, at chiara.carella@frost.com. One-on-One
interviews with Frost & Sullivan senior growth consultants are also being
scheduled. For more information you can also visit www.frost.com/giluk

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Contact:
    Joanna Lewandowska
    Corporate Communications - Europe
    P: +48-22-390-41-46
    E: joanna.lewandowska@frost.com