OYSTER BAY, N.Y.—Long-term growth in the wireless handset component market will be “impressive,” according to a recently released Allied Business Intelligence Inc. report.
ABI predicts that increased demand for mobile handsets will fuel growth in the component sector, causing the cellular integrated circuit market’s revenues to double from $13.9 billion in 2001 to $26.4 billion in 2006. “Without justification for 3G handset upgrades and without realistic blueprints to follow, IC markets face mounting obstacles,” said Natalie Amiama, ABI analyst and report author, referring to this year’s struggles. “The ability to react quickly and accurately will profoundly impact vendors’ long-term prosperity. But strangely enough, in a business noted for enabling communication, circumstance has to force industry participants to cooperate.”
The study also asserts: gallium arsenide and silicon players alike will be affected as multimedia functionality is emphasized over conventional communications; consolidation will occur across the entire handset industry; and once integrated 3G IC solutions are debuted, the cost of materials for 3G phones will be much higher than today’s GSM model.
