Global industry trends regarding future sales of wireless communications equipment are going to include enough opportunity for everyone with something to offer, according to the “U.S. Industry and Trade Outlook 1998.”
U.S. wireless industry growth projections “are expected to be as good or even better” next year as they have been in the past, the report found. The equipment market could increase by 15.5 percent each year for the next few years, and corresponding wireless revenues could reach $52 billion by 2000.
In 1996, the value of the entire wireless equipment market was pegged at $10 billion. At the infrastructure level, the current market is dominated by L.M. Ericsson, Motorola Inc., Nokia Corp., Lucent Technologies Inc., Northern Telecom Ltd. and Alcatel Network Systems Inc. With the frenzied buildout of personal communications services worldwide, smaller companies like Hughes Network Systems Inc. will become nearly as visible as their entrenched cellular brethren, especially in areas that don’t include the United States, Europe or Asia.
Motorola, according to the report, has no significant competitors for subscriber equipment; the company has garnered a 25-percent market share. However, Commerce added, “Some analysts believe that the U.S. industry’s inability to adopt a common digital standard has adversely affected U.S. foreign sales of cellular network equipment.”
“The global wireless market is poised for tremendous growth over the next five years and beyond,” the outlook said, mostly due to an untapped communications market that now can be addressed fairly cheaply. Some 500 wireless systems exist worldwide, but that number could triple by 2000, thus opening the revenue floodgates for astute manufacturers.
The top 10 global cellular marketplaces now includes the United States, Japan, the United Kingdom, China, Italy, Germany, South Korea, Sweden, Spain and France. However, the fastest-growing markets-those with more than 1 million subscribers-include Spain, Japan, Brazil, South Korea, China and Mexico.
Asia is the fastest-growing region overall, Commerce’s outlook suggested, with more than 40 million subs in 1996. Japan’s subscribership more than doubled during that year as well.
The United States will continue to be the largest cellular equipment buyer “for the foreseeable future,” even though switch orders will decline year by year. The buildout of new cell sites will continue to rise during the next two years, reaching more than 6,000 at a cost of $2.24 billion by 2000.
Cellular handset sales also will increase with more subscribers, with orders reaching almost 24 million by 2000, translating into $7.5 billion for manufacturers. The average price of each phone, regardless of it being analog or digital, is dropping, with the report citing a $372-per-unit price in 1996-a 14-percent drop compared with the year before.
Commerce’s outlook also predicted that 50,000 PCS base stations will be installed by the end of next year; as of last January, the total PCS equipment marketplace-for both infrastructure and subscriber units-was estimated at $13.6 billion. Lucent received the bulk of the contracts, with Nortel, Ericsson and Motorola following behind, and 1998 is expected to be a peak year for PCS equipment sales.
