Trends

• No slow down expected in handset sales growth.
• Mobile phone operators continue to roll out 3G systems.
• Phones become full-fledged portable media players.
• The next big thing: TV/Video on mobile devices.
• Dual-mode cellular/Wi-Fi models set for take-off.
• RIM settles patent dispute, prepares for new Blackberry competition.
• High-speed networks promise faster Internet access, better gaming experiences.
• CEA offers wireless retailer tool kit, wireless certification program.

While you can’t always trust statistics – a wise man once said they should be used in an argument much the way that a drunkard uses a lamppost: for support instead of illumination – it is tough to dispute the numbers underpinning the notion that the mobile wireless sector is enjoying remarkable growth.

CEA is predicting that total wireless handset sales will exceed $16 billion in factory-to-dealer sales in 2006, with unit sales approaching 125 million. Indeed, one can argue that wireless communications devices drove the CE industry in 2005, when some 104 million wireless handsets were sold, representing a total of $13.5 billion in sales.

This success is partly due to the introduction of phones that have multiple features and functions. New wireless handsets are being marketed as portable entertainment centers with voice communications as a sideline; these devices are spurring strong replacement handset sales. Many phones in today's wireless market come equipped with digital cameras and camcorders, MP3 players, GPS navigation and live TV capability and some even serve as portable modem connections.

There now are more mobile phones in consumer’s hands – two billion worldwide – than televisions and PCs combined. Of course this fact itself doesn’t guarantee future success, particularly if the consumer’s buying experience is such that they’d rather have a root canal than have to buy a mobile phone. Happily, CEA’s Wireless Purchasing Study: Measuring Satisfaction and Loyalty found that the majority of consumers are satisfied with their wireless phone buying experience, which may be helping to increase the number of wireless-only households. The study found high satisfaction levels for in-person as well as online purchases of wireless phones. Respondents gave customer service representatives high marks for product and service knowledge, courtesy and availability. 

Wireless Phone Sales to Dealers
Unit Sales           Dollar Sales       Average                     (Thousands)            (Millions)        Unit price
2001                 53,400                    $8,651         $162
2002                 58,740                    $8,106         $138
2003                 70,488                    $9163          $130
2004                 84,586                 $10,538          $130
2005e             104,500                 $13,585          $130
2006e             124,800                 $16,099          $129
Source: CEA Market Research

The same study shows a shift away from landlines to wireless phones for many consumers, particularly younger age groups, those who rent their homes and singles. A full 17 percent of consumers who purchased wireless phones in the 90 days prior to the release of the study in December 2005 reported using their wireless phones exclusively. The complete study is available free to CEA member companies. Non-members may purchase the study for $499 at http://www.ce.org/.

There are other solid reasons mobile phones sales are a good bet to stay hot. According to the Telecommunications Industry Association (TIA), 25 million new wireless subscribers were added in 2005, more than in any other year. TIA predicts that the total number of wireless subscribers will reach 218 million in 2006 and grow to 270 million by 2009. The industry group also forecasts that spending on wireless handsets will grow at a 14 percent CAGR, rising to a projected $23.7 billion in 2009.

Looking at the market from a global perspective, worldwide mobile phone shipments grew an impressive 31 percent year-over-year, to reach 229 million units during Q1 2006, according to research from Strategy Analytics. Following this strong performance, the market intelligence company has upgraded its global mobile phone shipment forecast to a nice, round one billion units for the full-year 2006.