U.S. HANDSET MARKET COULD BE SHAKEN UP THIS YEAR
01/19/2000
Wireless Today
(c) 2000 Phillips Business Information, Inc.
Nokia [NOK] continues to lead the U.S. wireless handset market, but the door's open this year for
vendors offering CDMA models to move up in the market and challenge the Finnish wireless leader,
according to analysts at Washington-based telecom consultancy the Strategis Group.
It was Ericsson's [ERICY] troubles in the CDMA market that allowed Qualcomm [QCOM] (12
percent) and Audivox [VOXX] (11.8 percent) to pass it in total marketshare for analog and digital
handsets sold in the United States last year, Strategis reports in "U.S. Wireless Handsets:
Marketshare and Trends."
The ranking doesn't include handsets made for integrated digital enhanced networks, which are
operated by special mobile radio carriers.
While the CDMA market is the most promising U.S. growth opportunity for handset makers, Nokia
held onto the top spot last year on the strength of its TDMA sales. Nokia models are promoted by
AT&T Wireless Services, the mobile arm of AT&T [T], in its Digital One Rate packages.
However, with Bell Atlantic [BEL] merging its domestic CDMA network with Vodafone AirTouch's
[VOD] to form a nationwide footprint, CDMA handset sales are likely to jump in the country.
And Kyocera [KYO] is the wireless vendor most likely to profit from that increase, says Elliott
Hamilton, director of Global Wireless for Strategis.
"I expect Kyocera to be one of the major suppliers in the U.S.," Hamilton says.
The Kyoto, Japan-based electronics components manufacturer is buying Qualcomm's phone
business. The deal not only gives Kyocera a foothold in North American markets, it brings under its
roof the manufacturing operations of the company that developed CDMA technology.
Kyocera is scheduled to produce around 16 million handsets - including CDMA models - this year,
doubling last year's shipments. The company has only recently entered the U.S. handset market after
previously concentrating on Japan and South Korea.
Total U.S. handset sales were 43.3 million during 1999. Strategis forecasts sales of 50.5 million units
this year.
"Pushing up handset sales is due to a very high replacement rate for newer, smaller, longer talk-time
handsets," Hamilton says. "Current users are keeping their handsets for less than 3 years before
replacing with new ones."
Although Ericsson last year settled its dispute with Qualcomm over CDMA patent and licensing
rights, the Swedish vendor fell off the charts for handset sales in U.S. markets. This year could be the
make-or-break year for its CDMA chances.
"They definitely have to make this year their year to get back in the CDMA market in the U.S.,"
Hamilton says.
Motorola's [MOT] 23.1 percent share last year was second to Nokia's 34.5 percent of the U.S.
market. But the Schaumburg, Ill.- based electronics giant also could gain on or pass Nokia with
strong CDMA handset sales this year, Hamilton says.
"The whole CDMA arena is still wide open," he adds. |
