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Seiko Epson Sold Nokia Faulty Screens - Sources

Discussion in 'NOKIA' started by Malial, May 2, 2002.

  1. Malial

    Malial Senior Member
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    Seiko Epson Sold Nokia Faulty Screens - Sources
    May 02, 2002 06:22 AM ET
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    By Lucas van Grinsven, European technology correspondent

    LONDON (Reuters) - Japanese display maker Seiko Epson, part-owned by watchmaker Seiko, is the supplier of faulty mobile phone screens that have led to high return rates for Nokia products, industry sources said on Thursday.

    The world's largest cellphone maker acknowledged last month that an abnormally high number of its phones had been returned to shops and operators due to malfunctioning screens. But it did not name the supplier of the displays.

    Seiko and Nokia declined to comment.

    The Finnish phone maker said the unnamed supplier of the screens, which shut off and go blank, would have to carry the costs.

    Industry sources told Reuters on Thursday that Seiko Epson had been the manufacturer of the screens. Financial analysts estimate the cost at between $90.7 million and $136 million a quarter for repairs and replacements.

    "It's Seiko Epson. Other screen makers have received some of the business it had from Nokia," one source said.

    Nokia declined to specify if it had any a relationship with Seiko Epson.

    "When difficulties emerge we tackle them together with our partners, and, therefore, we don't comment on our suppliers," said Nokia Mobile Phones spokesman Tapio Hedman.

    Industry sources said Seiko Epson, Philips Electronics and Samsung Electronics were Nokia's key screen suppliers.

    The exact number of broken phones has not been given, but Nokia has said it was significantly less than 10 percent of its output.

    Surveys among phone retailers in several European countries consistently come up with a percentage of returned Nokia phones of between 20 and 30 percent.

    HIGH RETURN RATES

    Nokia, which produces some 140 million phones a year and has a 37 percent global market share, said the faulty displays were mainly used in its top-line models, the small and expensive 8210 and 8260, and to a lesser extent in the more basic and cheaper 3000-series.

    Carphone Warehouse, Europe's largest mobile phone retailer, said two weeks ago it had halted sale of the 8210, which retails in the UK at $289.50 without operators' subsidies, "pending a thorough investigation into the volumes of returns due to screen failures." No further details were given.

    The average of returned phones due to failures should not be higher than five percent, although some manufacturers have to deal with return rates of around 10 percent for certain new models, analysts said.

    Nokia said the fault had been fixed in February.

    Seiko Epson postponed its initial public offering (IPO) planned for last year after poor earnings. The firm is six percent owned by Seiko, which intended to sell its stake after the IPO but is now considering selling it before then.

    (Additional reporting by Edmund Klamann in Tokyo and Paul de Bendern and Brett Young in Helsinki)
     

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