OEMs' 2009 revenue to fall 10 pct -iSuppli

TAIPEI, Feb 11 - Contract manufacturers, the firms that make much of world's electronics, may face revenue declines of 10 percent this year as consumers across the globe hold off making purchases for phones and other gadgets, research firm iSuppli said.

Contract manufacturers, including Taiwan's Hon Hai and Singapore's Flextronics, toil behind the scenes making gadgets for big brands such as Nokia and Apple.

Those firms could reap combined revenue of $270.8 billion this year, down from $300.7 billion in 2008, the research firm said in a note released late on Tuesday. It had previously forecast growth of 2.2 percent for 2009.

"It's not pretty," iSuppli analyst Adam Pick said in a statement. "Stalwarts of the electronics marketplace -- including leading brands, manufacturers and component suppliers -- have issued lackluster guidance".

Growth within the contract manufacturing business has been slowing in recent months, and some analysts say a shake-out may be looming for many of these companies, with consolidation and mergers possible.

The global financial crisis has also hit some manufacturers badly, with Hon Hai's January revenue falling 12 percent from a year before after having seen growth well into the double digits for most of last year.

Flextronics also gave an outlook last month that fell short of market expectations, hurt by weakening demand for cellphones and other tech buys as consumers continue to rein in on their spending.

Smaller players such as Celestica, Sanmina and Elcoteq have also been hit, with revenues contracting and margins eroding.