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Home Page Editorial
November 12,  2003) 

From Publisher and Managing Editor's Desk... 

Topic - Is Wireless Market Getting Stronger and Is it Time for the Enterprise to Mobilize Vigorously?  

Yes, very definitely. The wireless market - carrier-focused voice-centric as well as enterprise-centric wireless data - has certainly bottomed out and is slowing climbing back up the curve surely and steadily. All vital signs are positive and we offer the following analysis for our bullish outlook: 

  1. Number of Handsets (Smart and dumb) and Handheld Devices (PDAs and other function-specific Devices)

According to a recent report by IDC, the worldwide market for mobile phones increased significantly in the third quarter of 2003, reflecting strong demand by first-time handset buyers in emerging markets like India and China and replacement buyers in mature regions (developed countries in Asia, Europe and North America). The number of handsets shipped in the quarter reached 130 million, a 21.2 percent increase over the same period in 2003 The combined outlook for 2003 was pegged at 460 million units, climbing to 500 million in 2004.

In fact, it was the first quarter since the recent meltdown of the telecommunications sector that all five leading mobile phone manufacturers (Nokia, Motorola, Samsung, Siemens and LG Electronics) issued reports of positive sequential growth. 

We quote IDC analyst Alex Slawsby - "After years of 3G promises, the pieces - the handsets, the features and applications, the bandwidth, and the networks - are starting to come together to make next generation wireless a reality. Mobile phones are already an important part of everyday life in many cultures as users have embraced the technology and embedded it into their lifestyle. Enticed by new form factors, expanded features and capabilities, and falling prices, consumers are poised to begin a prolonged replacement cycle by upgrading to next-generation phones. This, combined with new demand from emerging markets, will sustain handset growth for much of the forecast period."

As the number of mobile phone users approaches 1.4 billion individuals worldwide in 2004, IDC expects 42% year-over-year growth in the 2.5G market as vendors ship more than 241 million units. Meanwhile, shipments of 3G mobile phones will surpass 48 million units in 2004, representing 140% growth over 2003. One of the features driving this growth is the emergence of "camera phones" that incorporate digital image capture technology within the device. This segment will grow 64% in 2004, to nearly 100 million units. Similarly, IDC expects nearly 30 million converged mobile devices, or "smartphones," will be sold in 2004, representing growth of 111%.

  1. Revenue and Income Outlook Becoming Healthier
    Our newsletter stories during the past few months are a good indication of the trend towards improving income picture. Cost cutting, business efficiency improvements and dropping of unprofitable products, services and subsidiaries are showing results at Motorola, Ericsson, Nortel,  Lucent and others. Survival of these companies is no longer being questioned by rating agencies such as Standards and Poor, Moodies and others. 
  2. 3G Networks Are Becoming a Reality in Asia, Europe and may be in North America
    3G networks in Asia (Japan and South Korea) are very strong and attracting subscribers in respectable numbers. Our recent news items indicate that several major European carriers (except, of course, Vodafone with a new conservative CEO Mr. Sarin) have become quite optimistic and have announced plans for 2004 launches of 3G networks.  North American carriers who are lagging behind the world-wide trend have also started taking careful but assured steps towards building 2.5G and 2.75G (CDMA 2000 EV-DO) capacity for more subscribers and wireless data capacity.
  3. Wi-Fi Infrastructure Is Becoming Stronger Every Month 
    We need not tell you again that Wi-Fi is hot from every angle that we can think of. There is a lot of new investment from the VC community. Sales of Wi-Fi equipment have been steadily going up. Hotspot growth is steady - still short of the mark but increasing every month in every country nonetheless.  There is no letup on SOHO (Small Office Home Office) and SME (small medium enterprises) deployment of Wi-Fi.  Carriers are reluctantly accepting the inevitability of hybrid nature of future wireless networks (3G with Wi-Fi). Prices are coming down and we think that is good news for the consumers and businesses. Enterprise class smart Wi-Fi access points and switches are coming into the markets. Speeds of Wi-Fi LANs are going up with 802.11a, g and others. IEEE 802.16 wireless metropolitan  area network specifications are firming up with first vendors already off the starting line with products.  Solutions to Radio Physics limitation of coverage decreasing as speed increases is being looked at by the research and vendor community through the smart antenna technology. Finally, we kept the biggest problem of WLAN security to the last. We think that progress in this area has been very good so far and sooner rather than later, we would say that WLAN security problem has been solved for all practical purposes. 
  4. Handheld Devices - Ever-increasing Options for Consumers and Enterprise Professionals 
    Mobile users now have a full range of handheld device options in different form factors and with extensive set of features and options for meeting their personal and business needs. These devices can range from a full-function Toshiba notebook with a 17" screen (as a digital mobile home entertainment device), PDAs like Treo 600 and smart phones like Sony Ericsson's P900. These devices can display information and audio/video content for a variety of applications. The devices come in inexpensive consumer versions to more expensive industrial versions with ruggedness conforming to military standards like MIL 819. This might sound confusing to the uninitiated but with a little bit of help from experts (who said it is easy?), you can select the right device for the job at hand. Applications can range from simple e-mail to complex ERP applications of the enterprise. Go to our applications mall for a sampling of these applications.
  5. Need for the Business to Mobilize
    Against this background of improving wireless and mobile computing infrastructure, products and services, the business sector has identified Wireless as one of the four most strategic IT initiatives.  As the purse strings become a bit loose, wireless IT initiatives will benefit. CIOs know more than anybody else that must let go on their wireless pilots and deployment. With this deployment by the enterprise, benefits will come to the industry that feeds those solutions, including, of course, the systems and application integrators who put these simple (wireless e-mail to complex (wireless ERP) solutions together.

- Chander Dhawan, Managing Editor, 

Sources: IDC, EE Design, CommDesign (CMP), BizDev site (Kenzei) and Others

For your comments, click here

Chander Dhawan - Your Site's Principal Consultant and Publisher

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