Handset market recovery in focus after weak 2009

HELSINKI/SEOUL (Reuters) - Investors will focus on cellphone makers'' comments about the strength of the recovery in demand when they report their December quarter results this week and next.

"It will be the first quarter of growth since third quarter 2008 and it should formally signal the end of the global handset recession," said analyst Neil Mawston from Strategy Analytics.

Analysts on average expect the cellphone market to grow 9.3 percent in 2010, a Reuters poll of analysts showed.

The world''s No.1 cellphone maker Nokia forecast last month for market volumes to rise around 10 percent in 2010.

"Demand continued to recover in the fourth quarter but this remains an extremely tough market with a widening gulf between the winners and losers," said Geoff Blaber from CCS Insight.

HTC HARBINGER?

HTC, the world''s fourth largest smartphone brand, reported weaker-than-expected fourth-quarter results on Jan 6, weighed by increasing competition and rapidly falling prices for the feature-jammed gadgets.

"Pressure on the average sales prices is going to be of the outmost importance in 2010 thanks to the proliferation of smartphone competition," said Tero Kuittinen, analyst with MKM Partners.

"I''m convinced that strong volume growth is already priced in. This means that first quarter guidance is going to be very important," Kuittinen said.

All top cellphone makers release their December quarter earnings within one week -- starting from Sony Ericsson on Jan 22. Apple will report on Jan 25, LG Electronics on January 27, Nokia and Motorola on Jan 28 and Samsung on January 29.

Nokia is expected to report a 27 percent drop in fourth-quarter earnings per share, dented by recession-hit demand, a Reuters poll of 37 analysts showed.