Mobile Computing Outlook

"Visionaries conceive the original ideas and promise beyond the realm of immediate possibility. Technology missionaries convert these visions into prototype products. The early adopters bleed through challenges of these imperfect products so that the followers can benefit from their trials and tribulations." - Chander Dhawan, Managing Editor of MobileInfo.com site

• For MobileInfo's forecasts for 2003, published in January 2003, go here. 
• For MobileInfo's forecasts for 2002, published in January 2002, go here. 

• For MobileInfo's forecasts for 2001, published in January 2001, go here. 

• Market Outlook  - Miscellaneous Metrics as Published in the Trade Press 
• Cellular Handset Forecasts 
• Resources - BWCS, especially Europe
• Market Trends 

Original Text Written in 1999 But Updated in 2003 - Somewhat dated but basic trends still valid - Comment from the Editor in January 2003

With ever-increasing sales of mobile computers, hand-held PDAs, and web-enabled smart telephones, mobile computing has been hailed as a hot new technology that will significantly change the way in which we conduct our work as well as non-work-related activities.  Enhancements to wireless network infrastructure during the past three years gave mobile computing a new meaning. Many vertical industries, such as financial services, public safety, health care and utilities have adopted mobile applications since early 90s.  Even horizontal applications. such as field-service dispatch and Internet e-mail access have made significant gains recently.  Since 1993-94, early adopters of mobile computing, UPS, Federal Express, Sears, Xerox, IBM, and Merrill Lynch among them, have demonstrated the potential of the technology. Recently, consumer applications of wireless data were promoted by the service providers as a major extension of smart phones. Now mainstream businesses are seriously considering this technology in a serious fashion.

Despite this early adoption, penetration of mobile computing as a mainstream technology into organizations has fallen behind the forecasts of most of industry's market research companies.   In spite of this lack luster growth of mobile computing during 1990s, we firmly believe that time for mobile computing has finally arrived. While we agree that hype (in 2000 and 2001) was greater than real penetration of wireless applications, fundamentals were and still are quite strong. However, wireless and mobile market is not exempt from the impact of external environment. To make things worse, the  industry has not delivered in many areas. Nonetheless, wireless will follow an inevitable path of gradual adoption of a highly promising but equally complex technology. This implies that during the next five years, we would see increasing number of technology pilots and re-work of pilot implementations when we rollout. This will be accompanied by maturation of infrastructure products like devices and 3G & 4G networks but most importantly professional services - all resulting in streamlining of business processes. 

There are several reasons for wireless and mobile computing coming of age, so to speak:

• Business factors - substantial increase in remote workers, telecommuters, need for improved customer service
• The economic justification of mobile computing solutions through productivity gains and competitive advantages gained by early implementers
• Availability of inexpensive hardware (especially, hand-held computers, PDAs and smart phones with pre-packaged vertical industry application solutions
• Less expensive and faster wireless networks, especially 2.5 & 3G wireless networks on the horizon
• Convergence of the Internet, wireless and e-commerce technologies
• Thousands of vendors and developers creating innovative mobile applications that are easy to implement - watch for rationalization, however because not everybody will succeed.
• The emergence of "ready-to-implement" vertical and horizontal applications. especially WAP-based Internet applications
• Growing adoption of Internet-based horizontal and vertical applications - wireless e-mail, workgroup applications, corporate information access,  and financial transactions
• Emergence of location-specific and mobile commerce applications, especially by socially-upscale and mobile population 
• Mobile projects have started getting higher priority in the eyes of CIOs and IT decision makers in 2003 now that economy has bottomed out and is on a mend.

Size of Mobile Computing Market (Use with care in 2003 - Do a keyword search on our site with market as keyword for various reports published on market outlook and market size. Go to CTIA site, IDC, InStat/MDR and other market research sites for more current info)

This indeed is a tough question to answer. There are perhaps as many answers to this question as the number of research firms who are specializing in this marketplace.  Who is right? Since nobody seems to know the right answer and most industry projections have proven to be wrong any way, we do not wish to add to this confusion. However, we shall give one or two estimates which will put you in the general ball park.

There is no doubt that the mobile computing market is quite big. If we include in this market mobile devices used by the end users, wireless LAN installations, public wireless data network services (such as Motient, Cingular, public-shared CDPD and private data wireless network infrastructure, especially in the public safety industry), application software products and systems integration services in this market, the size of the market was easily in 300-40 billion dollar range in North America alone by the year 2002. The largest segment, of course, is the cost of mobile computers, PDA and wireless-centric smart phones used by the remote workers.  Around the world,  this figure could be twice this amount -- $6 to $80 billion. Please note that we have not included in this gross estimate infrastructure-structure market for voice services.

According to one study done by Yankee group in 1998 and quoted by Motient, the total number of users who can benefit from wireless data is 48 million users (28 million professionals and 20 million other users) in USA. If the industry can achieve a penetration ratio of 10 to 25% among these users, you will find our suggestion to be reasonable.  Based on an average expenditure of $5000 per user ( a modest figure), one can estimate a rough size of the market - MobileInfo Editor.

Market Outlook Numbers (Mid 2000)

• By the year 2010, there will be one billion wireless subscribers worldwide on 3G (third-generation) networks. (Source: Strategis Group)

• On January 1, 2000, the worldwide penetration of wireless service was approximately 7½%. Penetration will exceed 32%, on a global basis, in the first decade of the new millennium. (Source: Cahner’s In-Stat Group) 

• By the year 2004, revenue from wireless data will reach $33.5 billion globally (Source: Strategis Group)

Handheld Market Size, Share Topics etc.

Windows CE/Pocket PC  versus Palm - Palm continues to have over 70% market share in its class - Windows CE devices, all together from various manufacturers, were able to garner only 25 % during 1998 and 1999.  Pocket PC helped a lot in 2000 and Microsoft did gain a few more points in market share during 2000.  The trend will continue in 2001. Go to this report for Windows CE versus Palm Market Share report (somewhat dated).

Also go to Smart Handheld Devices Market Report (1999) by Wireless Data Forum.

Wireless LAN Market Projections

Wireless LAN segment of the mobile computing market is making significant progress.  According to IDC’s market study, this market is expected to grow from approximately 1,003,000 shipments today to 4,099,000 shipments in 2003, or by an average of more than 30 percent each year.  Proxim is a leading vendor in this market. Frost & Sullivan conducted a similar study on this market. To see excerpts from this report, please click on Proxim/Frost &Sullivan Report page. 

Narrowband Mobile Data Market in 2004

According to Strategis (a market research company) report, mobile data market from narrow-band PCS (speeds of less than 28800 bps for now) will reach $5.8 billion ($3.2 billion in service revenue and $2.6 billion in equipment revenue) by year 2004. Currently, mobile wireless data industry has 2.8 million subscribers with $860 million in services and equipment revenue. This does not include broadband market revenue.

Blue Tooth Market Size - Cahner's Recent (2000) Market Study 

 According to recent Cahner study, the number of Bluetooth-enabled devices is estimated at 200 million in 2003 and at 600 million units by 2004. Qualcomm and Ericsson have agreed to implement Bluetooth technology in CDMA handsets. One scenario for such a device will be to receive e-mail, then go to a printer equipped with Bluetooth and print the e-mail.

Canadian Scene - Wireless Data Market

According to a study done by Yankee group of Canada published in Canadian Dealer News (July 23rd, 1999), wireless data market is expected to grow rapidly. It will grow from 4% penetration (as a % of wireless users) to 25% by the year 2003.

MobileInfo's assessment is that this forecast is aggressive though possible, if you take into account the growth of wireless cellular/PCS subscriber base for voice itself.  In our view, it is possible to achieve this growth only if network subscribers keep the cost of usage lower and wireless Internet application growth takes off.

Lucent's Wireless Study Initiative (Nov 2000)
In November 2000, Lucent launched a $10 million global research program to study the business impact of wireless applications on the Internet. This is a long-term study and will last five years. The program will cover both Europe that is more advanced and North America. Boston University School of Management will receive 5 million while London School of Economics and Insead Business School of Paris will share the other 5 million. The focus will be on 3G and vertical markets - financial, off-shore drilling, etc.

For a More Recent Study on Wireless Market, go here.

Horizontal Business Application Breakdown

• Evans Data Developer Survey - Go to our Horizontal application index

Recent Reports on Market Outlook  (end 2000)

1. ARC Group of UK's  Presentation on "Market Positioning  of Wireless Internet"  - From a Conference held in Singapore - 2000 - a PowerPoint file.

2. ARC Group -  Executive. Summary of  "Report on Wireless Internet Market

3. ARC Group - Executive Summary of "Report of Fixed Wireless Market"

4. Strategis Group Presentation ( by Mr. Foss) on "Outlook for Wireless Portals"  delivered at a conference in San Francisco during December 2000

5. Wilstrup Interactive ( of Denmark) Study of End-users for WAP-based Mobile Internet (also called Wireless Internet)

AIDC (Automatic Identification and Data Capture) Market - Go to a summary of VDC report.

More Resources

• For random wireless market outlook metrics quoted in the press during 1999-2001, go here. 
• Also do a keyword search on the home  page of our website to get more information on market outlook reports.
• Go to market research firm websites  - CTIA site, IDC, InStat/MDR and ARC Group in England. In our estimation, ARC group forecasts are highly bullish.