The Tobin Report..FROM THE RESEARCH DESK: Have Cell Phones Become Essential?
According to many analysts and telecom companies, the wireless
industry saw a huge jump in handset sales in the wake of the Sept.
11 terrorist attacks. The reasons are obvious: people want to feel
safe as well as have the ability to call loved ones in the case of
emergencies. A few analysts believe this will give the handset
industry a boost it so desperately needs. But most say it is too
soon to determine if this is just a temporary surge in sales or the
start of a long-term trend.
In the past, cell phones were often thought of as luxuries and not a
necessity. However, the incidents two weeks ago have brought to
light the need to stay connected, regardless of your location. Tim
O'Neil of SoundView Technology thinks the wireless landscape has
changed. "Wireless is going to take on a whole new perception from a
consumer gadget to a consumer staple," he said.
Other analysts agree with this assessment and have even gone so far
as to rethink their previous estimates for U.S. wireless penetration
rates (or the percentage of the population that owns wireless
phones). Patrick Comack, analyst with Guzman & Co., said he will be
revising his numbers to reflect the current surge in demand. "To get
to 70% penetration (the industry's projected rate), you'd have to
have little kids and grandma and grandpa carrying cell phones and I
didn't think that was going to happen," he said. "Now, I'm thinking
maybe it will. Maybe everybody will be packing a cell phone at least
just for emergencies."
Guzman & Co. had thought that the industry would continue to grow
15%-20% per year driven by increased penetration, increased usage
time, Internet/data capabilities, and fixed wireless. And in a
report released before the attack, research firm Forrester
forecasted that 68% of U.S. households will have at least one cell
phone by 2006. The firm also predicted that by 2005, revenue
associated with wireless devices will reach $101.2 billion, up from
$52.4 billion in 2000. |
