500 million handsets is not enough
Roy Rubenstein
19 March 2001
Mobile operators are deeply concerned by the slippage in the delivery of new general packet radio service (GPRS)
handsets. That is one of the conclusions of a new study from Strategy Analytics Inc. of Boston, Massachusetts.
"It's a major concern among the operators we have spoken to," said Philip Kendall, the Luton, England-based director of
global wireless practice at Strategy Analytics. "They are very alarmed."
One factor for the delay is that manufacturers are struggling to produce a sufficient volume of GPRS handsets that meet
quality requirements.
"There is a compatibility problem with handsets working with the infrastructure from different suppliers," said Kendall.
This is one reason why Strategy is predicting 500 million handsets will be shipped globally this year.
"We are looking at a slowdown in net new users," said Kendall.
Commenting on handset maker Ericsson AB's first-quarter losses and Motorola's announcement that it is cutting 7,000
staff from its wireless handset division, Kendall said, "The problem with the handset market is that if you are not Nokia,
it's a low margin business."
But global handset shipments are set to double in the next five years, reaching one billion in 2006.
By then, the penetration rates in the United States and Western Europe will have risen to 85% of the population. Around
70% of these handsets will be voice-centric handsets, with only 3% being high-end multimedia-enabled smartphones.
Moreover, by then, 47% of U.S. users will be using code division multiple access (CDMA) technology. |
