Replacement Sales Drive 7% Growth in USA Market

Strategy Analytics has released a new report which concludes that handset sell through in the USA will grow 7% in 2003, with the Average Selling Points (ASP) holding at US$128.

"Replacement sales accounted for over 75% of sales in 2002, and will reach 84% this year, while churn is the most critical challenge facing US operators' pursuit of profitable lifetime customers. Vendors that demonstrate an ability to sell through to the high replacement, high ARPU Technopreneur and Connected Power Broker segments and have a laser focus on supporting carrier churn strategies will surge ahead in 2003," states David Kerr, VP of the Global Wireless Practice at Strategy Analytics."

"Vendors must simultaneously support operators' often unrealistic expectations for small, feature rich, stylish devices with cameras, color displays, audio and video applications and data connectivity support while meeting their requirements for most products to be priced under $125," notes Chris Ambrosio, Director of the Wireless Device Strategies service.

Ambrosio adds, "This is a tough proposition, and those vendors who offer the most compelling portfolios to support carrier retention and data service strategies will position for long term market participation, while those vendors who ante up a strong brand quality message and aggressively support marketing efforts for carriers' new data services will see the short term market growth."

Other findings from this report note that in the GSM world, Siemens and Samsung are the rising stars, while LG, Kyocera Wireless, and Sanyo each offer unique product strategies that will allow them to snag a larger share of CDMA growth in 2003.

2003 US Handset sales are expected to be approximately 85 Million units, but significant levels of inventory accumulated in carrier channels during Q4 2002, and will impact handset sell in for vendors in Q1 2003, particularly CDMA vendors."

Posted to the site on 18th March 2003