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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:
- 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%.
- 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.
- 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.
- 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.
- 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.
- 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, MobileInfo.com
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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