Cell phone market gloom spreads to LG, RIM

By Tarmo Virki and Marie-France Han

BARCELONA/SEOUL (Reuters) - Cell phone makers LG Electronics and Research in Motion warned on sales and profit growth on Wednesday, the latest sign a consumer spending spree on expensive gadgets has dried up amid economic gloom.

The world's fifth-largest handset maker LG said its sales growth would slow sharply next year, while Blackberry-maker RIM, No. 6, cuts its third-quarter sales and profit forecasts well below Wall Street consensus.

"The latest flurry of warnings shows the economic turmoil is impacting everyone in the mobile value chain -- from component suppliers to manufacturers, distributors and retailers right down to the consumer on the high street," said CCS Insight analyst Geoff Blaber.

"Demand is being impacted across the entire market," he said.

The world's two largest cell phone makers, Nokia and Samsung Electronics, have already warned the handset market could contract next year.

Nokia is expected to shed more light on the demand situation and industry outlook at an investor meeting on Thursday in New York.

Shares in RIM were indicated to fall sharply on Wednesday after its surprise announcement on Tuesday night.

RIM said it expected fiscal third-quarter revenue of $2.75-$2.78 billion -- 9 percent below the midpoint of analysts' forecasts, while adjusted earnings are now expected to be 81-83 cents per share, compared with 89-97 cents per share the company had initially forecast for its third quarter.