Disarray in the cellular telephone market has provided opportunities and alliances for some global contract manufacturers - but expensive dark clouds remain for numerous plastics processors.
``If you don't have a global footprint, you don't have a play,'' said Randall Barko, vice president of marketing and business development for Nypro Inc. in Clinton, Mass.
``We have seen less volume than what we hoped for [and] a shifting of a certain amount of market share,'' Barko said in a telephone interview. Nypro has 10 locations globally dealing with some cell-phone work, but customers are not doing volume production in the United States, he said.
Sales of cell phones have been flat worldwide at about 400 million units annually since 2000. According to a report from San Jose, Calif.-based Dataquest Inc., worldwide mobile-phone sales increased 0.8 percent to 98.7 million units in the quarter ended June 30, vs. the year-earlier quarter.
Rapid growth before 2000 and rosy projections drove market expectations now seen as unrealistic. The result has been a series of consolidations, closures and mergers:
* A property broker is seeking a buyer for an 84,000-square-foot plant in Georgetown, Texas, that Eimo Oyj closed, idling 60 employees. Lahti, Finland-based Eimo, which inherited the plant in its merger with Triple S Plastics Inc., moved most of the work to another facility in Fort Worth, Texas.
Eimo and a domestic operation of Perlos Oyj of Nurmijarvi, Finland, continue to supply domestic plastic components to Nokia Oyj's site in Texas.
* InteSys Technologies Inc., a unit of Textron Inc., has experienced significant changes. Historically a significant cell-phone supplier, InteSys of Gilbert, Ariz., acquired the assets of the TriQuest SA de CV plant in the Apodaca district near Monterrey, Mexico, on Sept. 5.
InteSys closed Advantage Molding and Decorating Inc. of Mount Prospect, Ill., in October 2001 after owning the business for four months, and closed Rego Mold & Tool Inc. of Wheeling, Ill., in February 2002 after operating it for seven months.
Also, InteSys shuttered a newly established, 80,000-square-foot facility for painting, assembly and molding in Fort Worth.
* Singapore-based contract manufacturer Flextronics International Ltd. has gained market share, increased in-house processing and outsourced. But it still has seen a need to curtail production, some related to cell phones, in Illinois, Texas and the Czech Republic.
Consolidations, closures and mergers also have affected Advance Dial Co. of Elmhurst, Ill., Shieldmate Robotics Inc. of Itasca, Ill., and Nolato AB of Torekov, Sweden. Mold makers, painters and other suppliers also have lost work.
Industry observers expect the shakeout to continue.
Major brands are standardizing phone platforms, essentially driving down costs. The same basic phone is appearing under different names in markets around the world. But there also is a trend favoring new features.
According to Dataquest, a unit of Gartner Inc., manufacturers are embracing color displays and mobile data technology. Carriers are commercializing multimedia messaging and other new applications.
As domestic production has slowed precipitously, foreign low-cost manufacturing sites have gained volumes and, in some cases, begun extending their upfront reach. Some Asian processors are forming links with North American firms to get closer to cell-phone designers and product developers.
Hi-P International Pte. Ltd. of Singapore is establishing a joint venture in the Chicago area with a tool builder to allow for early supplier involvement in moldmaking, prototyping and engineering. Hi-P has a production facility in Guadalajara, Mexico.
Taiwan Green Point Enterprises Co. Ltd. of Taichung, Taiwan, formed a partnership with Moll Industries Inc. of Davie, Fla., in mid-2001. A Motorola division was the venture's first customer.
Other Asian players extending their reach include the Foxconn operations of Taipei, Taiwan-based Hon Hai Precision Industry Co. Ltd. and three Singapore-based firms, Banshing Industrial Co. [Pte.] Ltd., First Engineering Ltd. and Sunningdale Precision Industries Ltd.
Separately, emerging mobile phone company Sendo Ltd. moved into larger quarters in Birmingham, England, while continuing to outsource manufacturing, principally in the Netherlands. Sendo began shipping terminals to carriers in Europe and Asia in May 2001.