InfoTech Marketing Press Release

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Tim Walters  -- (720) 732-4588

For Immediate Release

Wireless Inventory Management Deteriorates by 14% in Q2

Littleton, CO -- The wireless inventory management pendulum swung back as carriers increased inventories in the Second Quarter, 2004.   The 47.7 days of sales in inventory rose by 14% over Fourth Quarter’s 43.1 days, according to a study released today by InfoTech Marketing.  Handset inventory increased by $206 million to $1.5 billion, offsetting First Quarter reductions and exceeding Fourth Quarter levels.  While much of the increase came from Nextel, of the 14 carriers studied, eight experienced an increase in inventory days.

 

"New handset introductions increased inventory levels at many carriers," Tim Walters, President of InfoTech Marketing, said.  "Cost of sales increased, but not to the extent of inventory additions.  As they did last year, carriers should look to liquidate this inventory in the Third Quarter."

 

US Unwired achieved the best efficiency with 26.1 days of sales in inventory.  Of the large carriers, AT&T became the most efficient, maintaining 28.6 days of sales in inventory. 

  

“Inventory reductions to 30 days of sales could generate almost $600 million of cash flow,” Walters added.  “Commitment to inventory management, better forecasting, and improved ordering procedures are techniques carriers can use to get to this level.  Even if the carriers with over 40 days of inventory get to just 40 days, they would produce $250 million of industry cash flow.  "

 

The study compares 14 of the 20 largest wireless carriers with available data for both quarters.  The data originates from SEC filings or carriers’ investors relations departments.

 

InfoTech Marketing is a Littleton, CO based consulting company that assists carriers with inventory management.  Wireless carriers around the world have used the company's inventory management services.