Handset Industry to Be Worth US$100 Billion in 2006 - Report

Despite having experienced a myriad of difficulties over the past year, the global handset industry will grow from US$60 billion this year, to more than US$100 billion in 2006, according to a report from In-Stat/MDR. The report notes that in 2001, handset sales were plagued by overproduction, delays in the arrival of handsets with the desired feature sets, and a faltering worldwide economy. However, according to Ray Jodoin, a principal analyst with the research firm, "We can still look forward with a moderate amount of enthusiasm. Now that prepaid subscribers are being de-emphasized in many regions, the percentage of low featured, low margin, handsets are on the decline and prices are expected to remain reasonably stable over the next 5 years."

The company says that for handset sales to rise, new handsets will need to start offering 3 1/2 x 5 CM (minimum) colour displays, multi-band capability and some form of location based service.

"Content is key," said Jodoin. "While voice will continue to drive the worldwide market for the foreseeable future, data can help drive handset sales, not to mention margins, as well as carriers' Average Revenue per Users (ARPUs), upward. This is contingent, however, on whether the content and price are right, which they currently are not."

In-Stat/MDR has also found that in 2002, The Americas will account for the activation of 25.8% of the worldwide handset uptake. Latin America will take an increasingly important roll in handset activations, as their share of the worldwide market climbs to 10.2% in 2006 and in 2002, Rest of World (ROW) will account for the activation of 43.4% of the worldwide handset uptake, giving them a dominant Share of Market (SOM) position.'"

Posted to the site on 30th May 2002