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Handsets stuck on RadioShack shelves

The consumer electronics retailer reports a drop in handset sales, bad news to end a bad year for the wireless industry.

Dust may be settling on some mobile phones sold at RadioShack.

The consumer electronics retailer reported on Monday that handset sales at its stores were down in December compared with December 2000. The company declined to provide a specific number.

RadioShack earlier reported that handset sales in November were down by "midsingle digits" when compared with November 2000. The company did not offer a clear-cut number.

RadioShack's announcement Monday is bad news to end a bad year for the wireless industry. Barring a record-setting wave of buying during the last five weeks of last year, 2001 will be the first year in which the number of cell phones sold was lower than the year before.

Analysts believe RadioShack's end-of-year telephone sales slump may also hurt Verizon Wireless and Sprint, which sell phones at RadioShack stores.

Sales of wireless phones at RadioShack historically generate about 25 percent of Sprint's new subscribers, according to Peter Friedland, an analyst with WR Hambrecht. RadioShack outlets also stock wireless phones for Verizon Wireless, Friedland said.

Sprint projects it will have an additional 1.3 million subscribers in the fourth quarter. The company has yet to make any formal announcements, however.

"We believe the soft RadioShack figures are evidence of slowing industry subscriber growth, which suggest that it will be difficult for (Sprint) to post the same type of massive subscriber growth...that it has reported in the past," Friedland wrote in a note to clients.

Representatives for Verizon declined to comment. On Wednesday, the company is expected to make public how many new subscribers it garnered in the fourth quarter.

Representatives for Sprint, most traveling to the Consumer Electronics Show in Las Vegas on Monday, could not immediately be reached for comment.