India and China to Drive Handset Market Growth

Merrill Lynch's recent Global Handset Industry Update reports that the analysts expect market growth will be driven by India and China where they are expecting a combined handset volume growth of 21% CAGR from 2005 to 2010. They expect combined India and China will account for 26% of the overall handset market in 2007 and 28% in 2010, up from 16% in 2005 - implying nearly 332 million handset units in 2010 (129 million in 2005).

They believe mobile penetration in India is set to ramp and will reach 35% by 2010, up from just 7% as of 2005. This implies Indian mobile subscribers will reach 411 million by 2010, up from just 76 million as of 2005, a 5-yr growth CAGR of 40%.

In comparison, China's penetration rate should reach just over 50% in 2010, up from 29% in 2005. This results in approximately 682 million Chinese mobile subscriber by 2010, up from 374 million in 2005, a growth CAGR of 13%.