Mobile handset market to decelerate next year
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LONDON, December 2  - Analyst Angela Dean of Morgan Stanley expects mobile handset market growth to moderate in 2005.
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The global mobile phone marketis expected to see a slow down in market growth due to the lack ofadditional catalysts, US high tech market research firm IDC warnedon Tuesday.
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The market for content and services on  cell phones is expected to grow to $150 billion by 2011, as  access to the web while on the move becomes easier and faster,  research from Informa Telecoms & Media showed.
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(InfoWorld) - New research has confirmed that India's mobile phone market is set for a period of fast growth, with revenue from cellular services expected to jump by more than 18 percent each year for the next five years. Most of the growth will come from rural areas, where only 2 percent of the population have access to mobile phones today, said Madhusudan Gupta, senior research analyst at Gartner, which conducted the research. Service providers have already started to focus on rural markets, with aggressive rates and handsets priced at under $25, he said. Cellular service revenue in India will increase at a compound annual rate of 18.4 percent between this year and 2011, to reach $25.6 billion, Gartner estimated. Cellular revenue last year was $8.9 billion. As call rates fall from their current level of 2.6 cents per minute to rates comparable to fixed lines, which are about 0.9 cents per minute, a broad swathe of additional users will start using mobile phones, Gupta said. "The fixed-line infrastructure in India is not that good, which is giving enough of space for mobile wireless to move in," he said. Revenue from data will outpace that of voice services and contribute to about one fifth of revenue in 2011, more than double its share last year, although most of that growth will come from urban markets, Gartner said. As they expand into rural areas, operators will see their average revenue per user (ARPU) fall to $59.50 per year by 2011, from $82.1 last year. Successful operators will be those that make up for the falling ARPU through economies of scale, Gupta said. Operators are likely to collaborate by sharing infrastructure and outsourcing their network management to equipment vendors, and possibly system integrators, he added. For example, Bharti Airtel, a large Indian service provider, said Wednesday it had awarded a contract worth $2 billion over two-years to Telefonaktiebolaget LM Ericsson, to expand its network in rural areas and provide capacity management. The service providers should not be short of funds for expansion.Â Vodafone Group's acquisitionÂ in May of a controlling interest in the Indian operator Hutchison Essar, for $10.9 billion, has increased the valuation of all Indian service providers, and is helping them to attract private equity and other investments, Gupta said. The rural demand will come from businesses expanding into these areas, as well as from local businesses. Some individuals will own mobile phones, although the predominant model is likely to be a communally-owned handset, a concept already tried in some areas, Gupta said. India added 15.5 million mobile subscribers in the first quarter of this year, taking the total to 165.1 million, according to the Telecom Regulatory Authority of India. Gartner expects 58 percent of the rural population and 95 percent of the urban population to be covered by mobile networks by 2011. That year, the total number of mobile connections in India will have increased to more than 462 million, according to Gartner. India's total population at that time will be close to 1.2 billion, according to some estimates.
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Mobile phones are expected to generate more money this year than traditional fixed-line services for the first time due to surging demand in developing countries such as China, India and Russia, an annual industry report said.
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Palm Inc , the maker of  Treo cell phones, forecast lower-than-expected revenue amid  tough competition from Research in Motion Ltd's   Blackberry and Apple Inc's  iPhone, sending its shares  tumbling 12 percent on Tuesday.
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The global market for handheld devices continues to dwindle, according to data released by IDC this week. The industry has recorded a year-over-year fall for the third successive quarter, the researcher said.
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Global mobile phone sales rose by a robust 17.4 percent to nearly 271 million handsets in the second quarter, driven by dizzying sales growth of more than 40 percent in the Asia-Pacific region, according to the latest data from research firm Gartner. Moreover, Gartner now predicts that worldwide mobile phone sales will reach 1.13 billion units for the entire year.
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China Telecom, the country's largest fixed-line provider, sees half-year profits fall as users opt for mobile phones.
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Annual global semiconductor sales growth will probably fall by half in 2005 and memory chip sales could collapse as a supply glut saps prices, world-leading memory chip maker Samsung Electronics said on Monday.
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(InfoWorld) - Amid increasing competition in a fickle cell phone market, Motorola expects to report a loss for its mobile devices business in 2007 and now estimates that second quarter sales will be lower than expected. The number two handset maker said on Wednesday that second quarter sales for the company would be $8.6 billion to $8.7 billion, instead of $9.4 billion as previously expected. That drop in expected sales is the result of lower handset sales, particularly in Asia and Europe, Motorola said. In the second quarter, Motorola expects to report sales of 35 million to 36 million handsets. That will lead to a larger operating loss for the mobile device business in the second quarter compared to the first quarter, it said. During the first quarter, Motorola sold 45.5 million phones. At the time, the company said it foresaw a gradual recovery of its mobile phone business throughout the rest of the year with expectations of a profitable year. Motorola now expects a second quarter generally accepted accounting principles loss per share in the range of $0.02 to $0.04. The company will announce its earnings for the second quarter 2007 on July 19 and will offer further details then, it said. Motorola also announced that it named a new president for the mobile division: Stu Reed, formerly executive vice president of integrated supply chain for Motorola. Reed's predecessor, Ron Garriques, left the company in February to head up Dell's global consumer division. Prior to its first quarter earnings report, Motorola also had to warn that sales would be lower than expected. It made some executive changes then, including the appointment of a new president. Earlier in the year, Motorola had implemented a new plan to help it improve profitability, but that plan wasn't working out, the company said during the first quarter earnings warning. Most of the large handset makers are struggling to keep profits up as sales in established markets like Europe stagnate as most people there already have phones. The companies are increasingly branching out into emerging markets, such as India and China, but they must sell their phones at lower prices to win customers there. That's squeezing profit margins."The only real growth is at the low end, which means there's nice unit growth, but the dollar growth is not there," said Will Strauss, an analyst with Forward Concepts. "This year is a soft year for the cell phone market, in spite of Apple," he said. Apple's hugely hyped iPhone is expected to sell around 10 million units through next year, which may sound like a lot. But this number is dwarfed by the approximately 150 million units that companies like Nokia sell in a year, Strauss said. The iPhone isn't affecting the sales of the biggest cell phone companies, but it may help companies like Motorola realize what they need to do to improve their prospects, he said. The only way that the mobile phone companies can grow profits in saturated markets is to "convince everybody that they need a new cell phone with new bells and whistles," Strauss said. "The iPhone is raising awareness of what the future cell phones are going to look like." In addition, Motorola is notorious for producing hit phones, like the Razr, that sell well but then failing to follow up with additional models that continue the momentum. "They rode too long on the Razr," Strauss said. But the handset maker could get a boost later in the year when it starts selling the Razr 2, which Avi Greengart, an analyst at Current Analysis, said is a big improvement on the first version. Motorola is likely to learn from its mistakes the first time around too. "In the past, they really let the original Razr run away with volume as opposed to maintaining it as a premium fashion phone," he said. "I think this time they're going to resist the rapid price drop." This story was updated on July 11, 2007. Â
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The market for content and services on  cell phones is expected to grow to $150 billion by 2011, as  access to the Web while on the move becomes easier and faster,  research from Informa Telecoms & Media showed.
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The boom in mobile ringtones may be waning with the UK market set to shrink 20% in 2006, research suggests.
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LONDON (CBS.MW) - Growth in global chip sales is likely to halve in 2005, Samsung Electronics said on Monday, according to reports.
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Mobile search and display advertising will take off in the next five years, a research firm predicts.
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Japanese-Swedish mobile phone maker Sony  Ericsson said on Tuesday it expects slower growth in the global  handset market next year.
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ANNUAL growth in global semiconductor sales will probably fall by half in 2005 and memory chip sales growth could collapse as a supply glut saps prices, Samsung Electronics has warned.