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Report: Market for mobile gear near $250B mark

Wed, 12/22/2010 - 8:23am
Traci Patterson
Driven by the cell phone market in general and smartphones in particular, the worldwide factory equipment revenue generated by the mobile communications industry will be near the quarter-trillion-dollar mark by the end of this year, according to the market research firm iSuppli.

The research company said global mobile communications factory equipment revenue this year would reach $235.5 billion, up 7.9 percent from $218.2 billion last year, driven by the expansion of mobile broadband in all parts of the world, as well as by major increases in sales of 3G cell phones. Growth next year is projected to hit $271.3 billion.

It’s the salad days for the mobile communications market, which includes cell phones, cordless phones, battery chargers, mobile infrastructure, mobile and fixed broadband access devices, and wireless LAN equipment such as routers. By 2014, total mobile communications factory equipment revenue will reach $359.3 billion.

And iSuppli said that 3G mobile handsets this year will take up the largest share of revenue, at $86.4 billion, up 34.6 percent from $64.2 billion in 2009.

Revenue is also sizable, although declining, in the older category of 1G/2G mobile handsets – still a significant force in the emerging markets of Latin America, Asia and Africa. Revenue in 2010 for the combined 1G/2G category will fall to $55.6 billion, down 18.6 percent from $68.3 billion in 2009.

Revenue figures are much smaller in the emerging 4G sector, but growth is highest in this segment. From a paltry intake of only $11 million in 2009, revenue is expected to reach $1.3 billion in 2010.

“Among mobile handsets, 3G continues to be the dominant technology in 2010 and likely will maintain that distinction beyond 2014,” said Francis Sideco, principal analyst for wireless research at iSuppli. “For their part, wireless carriers – while wrestling with the issue of heavy data traffic on their networks – are attempting to maximize investments in existing 3.5G and 3.75G technologies through incremental network upgrades. At the same time, carriers are deploying next-generation 4G technologies such as LTE, to begin in earnest by 2011.”

Within the mobile handset segment, smartphones were the peak performers, with projected growth this year of 40.6 percent, compared with a 12 percent expansion in 2009. Manufacturers in the smartphone-specific space, such as Apple, Research in Motion and HTC Corp., continued to gain market share at the expense of other players with more generalized handset offerings.

Overall, cell phone shipments in 2010 were forecasted to reach 1.29 billion units, up 11.7 percent from 1.15 billion units last year. The projections don’t include the presence of “gray-market handsets,” especially popular in China, that contributed $8.9 billion worth of revenue to the industry for 2010.

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