Global Sources
EE Times-Asia
Stay in touch with EE Times Asia
EE Times-Asia > RF/Microwave

Mobile handset sector grows, albeit slowly

Posted: 08 May 2003 ?? ?Print Version ?Bookmark and Share

Keywords:isuppli? mobile phone? odm? oem? ems?

Analysts from U.S.-based market research firm iSuppli Corp., who track the mobile phone industry, said the gravy train has officially left the station while the 3G express has been downgraded to a local.

Dale Ford, iSuppli's director of market intelligence services, predicted the mobile industry will record unspectacular but sustained growth - as much as 11 - percent compound annual growth rate in production units through 2006. He conceded, however, that the days of more than 50 percent annual growth rates are over.

The market researchers also said this will be the first year that global production of 2.5G handsets surpasses the manufacture of 2G phones. Meanwhile, delayed deployment plans means 3G handsets won't hit the market "in any meaningful way until 2005 or beyond," Ford said.

Contrary to widespread concerns about the declining average selling price of mobile handsets, Ford said the industry would see small increase in average selling prices in 2003. The slight increase is due in part to a shift to new-generation handsets with cameras, gaming, and multimedia messaging.

The combination of strong handset production during Q1 of 2003, which the company estimates amounts to 108 million units, and a healthy Q2 for key suppliers has iSuppli projecting the industry's 2003 overall production volume to be 475 million units.

Citing Nortel Networks' estimates, Ford said data usage over mobile phones is contributing 10 to 18 percent of total revenues in Europe. Mobile gaming is contributing 3 percent.

In England, more than 1 billion web pages were viewed on handsets in Q4 of 2002. In Italy, 15 percent of new terminal sales are capable of multimedia messaging, which accounted for 10 percent of all usage.

As the mobile market grows more cyclical, the biggest challenge faced by handset vendors and chip suppliers comes from the evolving supply chain for mobile services. Companies that design, manufacture and supply mobile handsets are a very complex web of suppliers. They include system OEMs, original design manufacturers (ODMs) who supply handsets to multiple system companies, module suppliers, independent design houses, and EMS providers.

This proliferation, combined with shifts in the supply chain, has had a direct impact on service providers' hardware selection as well as systems and components costs for OEMs. This has often strained relationships between service providers, OEMs, and ODMs.

For branded OEMs, such a shift represents a threat since "ODMs could steal your customers," said Gregory Sheppard, an ISuppli vice president of market intelligence services. Meanwhile, chip, display, module and reference design suppliers "must track the winners [in the supply chain] to keep the business," he said.

- Junko Yoshida

EE Times

Article Comments - Mobile handset sector grows, albeit ...
*? You can enter [0] more charecters.
*Verify code:


Visit Asia Webinars to learn about the latest in technology and get practical design tips.

Back to Top