18 May 2006

Growth in Wireless Telecom still Massive

From a promotional email by In-Stat:
SCOTTSDALE, Ariz., May 12, 2006 – The market for wireless handsets was $110 billion in 2005. In-Stat predicts that it will grow 23%, to exceed $136 billion in 2006. It will continue to grow but at a slower rate, exceeding $250 billion in 2011. To put this in perspective, if wireless handsets were a sovereign country, it would be the 53rd largest economy, right behind Ireland, but growing more than twice as fast as China.
The problem with the comparison is that it does not put the matter in perspective. Growth in GDP reflects an increase in the rate of wealth creation of a country; the growth of the cell phone industry reflects the increase in the number of consumers, reflecting in turn a still-greater rate of change in the industry.
This growth is not preordained. According to the study, it depends upon phone manufacturers continuing to add features that consumers value and the rest of the industry can support. The greatest challenge is to just add the features different customers want without adding unneeded cost or complexity from unneeded or unwanted features. The report includes end-user survey results that explore current customer attitudes as well as how it corresponds to their past buying behavior.
Perhaps, but most of the people who adopt wireless in 3rd world countries (where all this growth is expected to happen) did so because the alternative didn't exist. I'm even inclined to suggest that the sentence, "This growth is not preordained," was put in to make the analyst sound like a sage. It's a platitude. Nobody controls what happens in China or India.
The goal for wireless phone manufacturers is to make customers forget they ever tolerated a phone without the new innovations. This has happened as the mobile phone has advanced dramatically in the past several years. According to the survey, very few US users, less than 5%, do not use at least one of the technological innovations introduced over this period, reports In-Stat (http://www.in-stat.com). Consumers seem ready to embrace other new features, including location-based services and Bluetooth connectivity, but only a narrow segment have interest in multimedia features and camera phones use will see a decline.

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