ST Blames Market (again)

ST was complaining about the rise of the ultra-low-cost phone and the relatively slow growth of the full function phone at its results meeting in January.

Now, in April, it's still complaining about the unfavourable product mix within wireless but, when asked, in March, if its was going to go for the fast emerging low -cost market it appeared to be saying no, it wasn't.

'At the low end, the volumes are significantly rising in emerging markets where communications infrastructures are developing fast and the cost optimization and superintegration (single chip) are a must. Here we are not competing with our own feature-rich solutions', said an ST statement.

Yet ST is renowned for being able to make very fast turn-round silicon based on its wireless platform technology.

So why doesn't it have a go? ST, more than anyone, knows that low manufacturing costs can deliver just as good a margin on a low-priced part as on a high-priced part. And ST has a formidable low-cost manufacturing machine.

There's no point trying to buck the market. If the market wants low-cost phones then it's no use sitting there, taking the fall in revenues and profits and blaming a perverse market