Mobile phone network and handset manufacturer Motorola yesterday plunged the communications industry back into gloom as it warned that sales in the Asia Pacific region had been hit by the Sars outbreak.
Shares in technology and telecoms stocks across the world dropped as investors worried that the embryonic recovery in the sector would be killed off by the impact of the flu-like virus on the fast-growing markets of Asia.
Motorola, the world's second largest mobile phone maker, has a leading position in the Chinese market but admitted yesterday that it was coming under increasing assault from local manufacturers. It makes about 14% of its sales in the Chinese market, which mobile phone companies believe is going to play a pivotal role in the development of the industry.
Motorola now expects merely to break even in the second quarter, with sales down about $400m to between $6bn and $6.2bn. Its annual results may also be affected but the company said it would update the market fully in July.
Motorola's main rival, Nokia, the world's largest mobile phone manufacturer, is also expected to warn about the impact of Sars when it releases its trading update this week.
Motorola forecast yesterday that sales of mobile phone handsets would be down by about a fifth in the second quarter compared with the first three months of the year. The decrease is likely to be even more marked in China. Sales in the rest of the world are in line with the company's expectations.
Motorola shares were marked down as much as 6% in trading in New York yesterday.
