Mobile comms business heading for US$3trn

22 Dec 2010

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Share on FacebookTweet about this on TwitterShare on LinkedInShare on Google+Pin on PinterestShare on RedditEmail this to someone

Driven by the unstoppable mobile phone market and of course demand for smartphones, worldwide factory equipment revenue generated by the mobile industry will approach US$3 trillion this year.

Global mobile communications factory equipment revenue this year will reach US$235.5 billion, up 7.9pc from US$218.2 billion in 2009, driven by the energetic expansion of mobile broadband in all parts of the world as well as by major increases in sales of 3G cell phones, according to iSuppli.

Growth next year will be even more spectacular, iSuppli data show, when revenue surpasses the quarter-trillion-dollar level and hits US$271.3 billion.

Continued revenue growth seems assured in the years ahead for mobile communications, a wide-ranging market encompassing 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 US$359.3 billion.

Among the various segments of the market included in iSuppli’s forecast, 3G mobile handsets this year will take up the largest share of revenue at US$86.4 billion, up 34.6pc from US$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 US$55.6 billion, down 18.6pc from US$68.3 billion in 2009.

Revenue figures are much smaller in the latest-generation technology known as 4G—a category whose precise definition is in dispute—but growth is highest in this segment. From a paltry intake of only US$11 million in 2009, revenue is expected to skyrocket to US$1.3 billion in 2010.

3G is still dominant; 4G ramping

“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 long term evolution (LTE), to begin in earnest by 2011.”

Within the mobile handset segment, smart phones are the unrivaled stars, with projected growth this year of 40.6pc, compared to a 12pc expansion in 2009.

Manufacturers in the smartphone-specific space, such as Apple Inc., Research in Motion Ltd. and HTC Corp., continued to gain market share at the expense of other players with more generalised handset offerings.

Overall, cell phone shipments in 2010 are forecasted to reach 1.29 billion units, up 11.7pc from 1.15 billion units last year. The projections do not take into account the presence of gray-market handsets, especially popular in China, which will contribute US$8.9 billion worth of revenue to the industry for 2010.

Editor John Kennedy is an award-winning technology journalist.

editorial@siliconrepublic.com