Report: Emerging Markets Will Drive Mobile Phone Sales

Revenues from mobile phone sales will grow at nearly 7 percent annually through 2013 and will exceed $200 billion by that time, a London-based telecommunications and media research firm is reporting.

 

Officials at Informa Telecoms & Media say the growth will be driven by emerging markets in nations such as Brazil, Russia, India and China, and on the continent of Africa. Collectively, emerging markets will compose about 60 percent of the market share in 2013, Informa (News - Alert) officials say.

 

According to Malik Saadi, a principal analyst at the firm and author of its report – titled “Future Mobile Handsets” – the fall of feature phone and smartphone ASPs is leading handset vendors to look for new ways of controlling handset manufacturing costs in order to maintain margins.

 

“With this in mind, vendors have already shifted the majority of production plants into low labor cost regions such as China, Taiwan, India, Vietnam and Eastern Europe and now they have to play the only remaining card – lowering the bill they pay for chipsets and terminal software,” said Saadi, pictured right.

 

As TMCnet reported, another telecom research firm is predicting today that the number of Internet browsers on smartphones is expected to grow from 130 million this year to 530 million by 2013.

 

According to officials at IT market firm ABI Research, the rapid growth of the mobile Web on devices such as smartphones and cell phones has been a bright spot for the telecommunications market in 2008.

 

The firm’s research director, Michael Wolf, said that from the strong growth in ad-calls for ad networks such as Admob, to increases in page views for Opera Mini, it’s clear that consumers have embraced the use of the Web on mobile devices.

 

“The increase in awareness of the web on mobile devices – due to the iPhoneand new RIM models – has helped contribute to this growth, as has the continued move towards flat-rate data plans by many mobile operators,” Wolf said.

 

The rise of touchscreen-capable devices such as the iPhone, new BlackBerry Storm, and widely anticipated Google (News - Alert) Android phone from T-Mobile USA, are helping fuel the proliferation of the mobile Web.

 

According to Informa’s report, mobile phone sales growth in developed markets won’t exceed 2 percent annually through 2013.

 

If a recession sets in, the figure could even turn negative, Saadi said. Even in developed areas such as the United States, Japan and Western Europe, increases in smartphone sales will only help offset the sharp decline of non-smartphone market value, he said.

 

Also, Saadi said, the mobile handsets industry is turning toward an open source, community-based approach. That approach will bring a reduction in payments related to terminal software while helping vendors lower maintenance costs.

 

“With all these efforts OEMs will find it hard to maintain feature phone and smartphone margins in the future,” Informa reports. “This is due to growing competition in these market segments involving different types of vendors including incumbent OEMs, consumer electronics vendors, PC vendors, and internet content providers.”

 

According to Saadi, it’s becoming clear that handset vendors in developed regions can no longer rely on mobile phone sales to sustain growth.

 

“They will have to look at other opportunities, for example getting involved in content creation and service offering,” he said.