Mobile Phone Sales Start to Slow

4 October 2006 by axxxr
The rate of overall worldwide mobile handset growth will slow dramatically from 2007.

The latest edition of Informa's flagship report, entitled "Future Mobile Handsets", reveals that saturation in developed markets will start to balance out the booming growth in emerging regions. Informa predicts the number of handsets shipped will still rise from 814.4 million at the end of 2005 to 1.255 billion by 2011.

Since the slump in the worldwide handset market at the turn of the century, it has experienced double-digit growth year on year. Informa's predictions, however, reveal this buoyant growth will slow from 2007 onwards, with annual growth rates eventually declining from 15.7% in 2006 to 3% in 2011. The emerging economies are experiencing large increases in subscriber numbers, driven by healthier economies and the availability of low-cost, entry-level handsets. Yet in more developed regions with high penetration rates, growth is largely restricted to active replacement of technologically advanced handsets - with capabilities including digital cameras, MP3 playback, video and broadcast TV - and will not sustain such major increases.


Consolidation among handset manufacturers has been prevalent in recent times, and Informa predicts a sustained period of mergers and acquisitions. Intense competition and a shortening handset model lifespan are forcing many vendors and operators to drastically change their business models or risk dropping out of the market. Many - especially in the over-serviced Chinese market - will be swallowed up by dominant leading brands such as Nokia and Motorola who are pulling away from the rest. Pressure will also come as a result of the very low profit margins gained by low-cost handsets sold in some developing territories.


In developed markets, functionality will become ever more important for handset manufacturers as they attempt to maintain sales in spite of high levels of penetration. The onset of multimedia messaging, in tandem with colour screens, has now pushed the mass-market arrival of cameraphones in most markets worldwide, followed closely by gaming, video download and video streaming. The next key battlegrounds for vendors are music and mobile TV.

According to Informa's findings, 9.6% (120.12 million) of all handsets sold will be equipped with broadcast mobile TV capability in 2011. The strongholds of China and South Korea will dominate this sector over the coming years, but by 2011 the US, China and Europe will have also grown to be key.

Informa believes the number of handsets sold with music capabilities will rise from 69.8 million in 2005 to 126.1 million in 2006 - an 80% increase. 2011 is predicted to see 55% of all handsets sold enabled with music playback functionality.

Cameraphones, one of the most successful features of next generation handsets, will represent 81% of total handset market sales by 2011. Informa believes this is still a major growth area, especially as operators have thus far failed to capitalise on increasing revenues from cameraphones by focusing the technology on person-to-person messaging rather than activities normally associated with digital cameras, such as uploading pictures onto PCs and either printing them out or sharing them via the Internet. Improved software enabling users to upload images straight onto a personal mobile web blog (moblog) site will help drive the market.


Asia-Pacific has been the world's largest handset market over the past four years, with sales estimated at 287.8 million in 2005 - 38% in China alone. Growth in the region is expected to continue dramatically over the next five years as penetration is still relatively low.

North American handset sales reached 120.1 million in 2005, and a period of extensive network transition plus a flood of new handset models should see this continue in the short term. The market in Latin America is also picking up speed mainly through the large increases in subscriber numbers in what is a highly populated region with low penetration rates. Africa and the Middle East will lag behind the rest of the world over the forecast period, although some countries will experience solid growth, such as the relatively technically-advanced countries of Morocco, Egypt, the UAE, Nigeria, South Africa and Saudi Arabia.To purchase this report, please visit :

On 5 Oct 10:11 adeel wrote
nokia 3650

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