BOSTON-Continued consolidation, emerging location-based services, mobile-commerce applications, as well as new marriages between communication, entertainment and Internet players, will be the defining market trends during the next five years, according to Strategy Analytics’ latest report, “U.S. Cellular Market Forecast.”
“1999 was another banner year for the U.S. wireless industry, with penetration passing 31 percent. Growth continues to be driven by the rapid adoption of digital solutions and enabled by the radical improvements in the cellular value proposition,” said David Kerr, vice president of wireless programs at Strategy Analytics.
The report noted the top six networks control approximately 75 percent of U.S. subscribers, and it predicted further consolidation in 2000 with BellSouth Corp. and Nextel Communications Inc. identified as targets.
Flat-rate national tariffs, in combination with increasing buckets of bundled minutes, will continue to be at the forefront of the battle for market share and will result in dramatic improvements in the cellular value proposition, Kerr said.
Assuming there is continued improvement in the cost per minute, deployment of calling party pays and a movement to offer better value in family networking, there will be more than 225 million subscribers by 2005, the report predicted.
The report also forecasted surging handset demand in the United States, with replacement unit sales representing close to 80 percent of all units by 2005. Samsung Electronics Co. Ltd. will emerge as a serious challenger for the top three, said the report.
“Replacement sales and the ability to retain customers as they migrate from entry level to mid-range to ultimately a wireless multimedia personal communicator will be critical to both device vendors and network operators. Nokia continues to extend its lead while Motorola (Inc.) will complete its remarkable recovery in 2000,” said Kerr. “In many ways, the more interesting battle to watch in 2000 and 2001 will be between (L.M.) Ericsson and Samsung.”
