--Mike
I'm confused.
You too, eh? <g>
<< Cahners concludes: "If a shortage does not cause a drag on manufacturing, the [handset] industry should return to rapid growth in 2002." >>
Here, I think Cahners is talking about some of the leading edge componentry necessary to facilitate the production of real 2.5G handsets in volume: Advanced chipsets, power amplifiers, memory, new display technology, all the enablers that add the sizzle that will attract us consumers, and although they don't mention it, I think they are concerned with manufacturers capability to ramp production with new lines.
Think of our Qualcomm and the need to get the powerful and high ASP MSM5100 out the door, into manufacturers hands, into handsets, and on to retailers shelves. If the ASIC gets to the manufacturer, but the display (or some minor but essential component) doesn't, no handsets on the shelf for Christmas, 1st quarter, or later.
Some of this I'm guessing at since what I quoted was of course summarry data.
<< Yet earlier in their summary, they say: "handset unit sales will rise ... from 402 million last year [to 2005 when] annual handset unit sales will approach one billion." Even if they attain one billion, that's only a 20% average annual increase. Considering that in five years the ASP will be much lower than it is today, where is the tornado? Where is the break-out showing the data tornado? >>
Ha! Now you are getting to the meat of the matter.
What you see is what you get.
Here we are, waiting for the wireless data tornado, and the wireless multimedia tornado that follows, and all we get for our wait is a measly 20% average annual increase in subscriber appliances (average across technologies), and as for unit volume of chipsets, and royalties on same, that 20% average annual increase is about it.
Now there is a bit more to it than that because lumpy infrastructure sales add chipset and royalty revenue particularly in the buildout period, which is commencing right now, across technologies and which will continue through 2007 (so sayeth the seers).
Remember, cellular subscribership rate of growth has peaked, and is forecasted to flatten or decline even in actual terms as we transition to more of a replacement market as a result.
Hopefully CDMA will trend better shortly from a market share point of view (and I think it will to at least a small degree) ... using the Qualcomm numbers in the Roadshow (supplied by EMC) we are looking at an increase from 12% to about 25% by 2005 (hopefully ... that's just one sources estimate though, and its based on what is known or perceived today with no technology flips thrown in), and that I am estimating will increase to 50% by maybe 2008 as WCDMA rolls in more substantially and maybe 70% by 2010.
<< Considering that in five years the ASP will be much lower than it is today, where is the tornado? >>
First of all lets hope the ASP is higher than it is today.
I mean we can say that handsets once used primarily for voice (with some rudimentary text messaging) will be replaced by more sophisticated devices that will be used for both voice and data, or data only (that 5% of devices in 2001, 29% in 2002, 41% in 2003 ...), that will increase overall ASP (hopefully substantially) which right now is as low as it can be. reverse the trend in ARPU, and drive the growth of software and services revenue (like the Club Nokia platform for Nokia. or BREW for Qualcomm).
But you are right to question the (lack of evidence) evidence of a tornado.
All this relates to my comments about needing to supplement the subscriber metric we rely on with other metrics, to track the wireless data paradigm shift that we sense we are verging on.
For example conservative Strategis Group is predicting revenue from wireless data will multiply by a factor of 10 in 4 years, reaching $33.5 billion globally by 2004.
... but subscriber growth (unless you track primarily voice users becoming data users) or subscriber appliance unit sales, or even subscriber appliance revenue, isn't going to show that 100% YOY growth we look for to signal a tornado.
I think that is reality. I'm willing to be convinced otherwise.
- Eric - |
