FocusUS iPhone craze makes no dent in PC glut

06 July 2007 00:31  [Source: ICIS news]

By Al Greenwood

HOUSTON (ICIS news)--The voracious US appetite for innovation in consumer electronics might not alleviate a global glut of polycarbonate (PC), a consultant said on Thursday.

Apple's recent high-profile release of the iPhone showed that the American consumer remains eager to snap up innovative goods, even when it means standing in line for 24 hours to do it. Media reports estimated that sales of the handsets were anywhere from 300,000-700,000 in the first weekend alone.

The iPhone, as with other cell phones and electronics. uses plastic backings made of PC. The sales of such products have risen consistently in the US with each new innovative feature, according to statistics from the CTIA, a trade association that represents the US wireless industry.

In 2006, the US had about 233m wireless subscribers, up 12% from 2005 and 430% from 1996, according to the association.

Globally, cell phone sales are expected to increase by 100m units in 2007, an increase of 10% when compared with 2006, according to the Semiconductor Industry Association, a trade group that keeps track of the end markets of semiconductors.

The release of the iPhone will make up a part of that increase, said George Scalise, association president. However, since the product makes up such a small part of the total number of phones sold, it will not have a major effect on sales, he said.

For other electronics, sales of personal media players and MP3 players are expected to reach 215m units in 2007, up by more than 20% from 2006, the association said. Personal computer sales will reach 255m units in 2007, up 10% from 2006.

However, such growth might not be enough to address the world's PC glut, Greg Smith, global business director of engineering resins for Resin Technology.

Resin Technology estimates that global PC demand is growing by 5-6%/year, while supplies are growing at about 10%/year, Smith said.

For other chemicals, electronics are major end markets, as they consume liquid crystals and films for displays, said Kevin Swift, chief economist for the American Chemistry Council.

However, electronics make up a relatively small market for chemicals in America, Swift said. "Most consumer electronics are not made in this country anymore," he said.

Swift estimates that electronics make up $500m (€365m)/year in direct US chemical purchases. By contrast, furniture makes up $1 bn.

($1 = €0.73)

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