LONDON-Global handset sales are expected to continue to grow during the coming five years, according to a new report by wireless analyst firm ARC Group.
The firm predicts 16-percent growth this year with 561 million phones sold. The growth rate is expected to slow during the next five years as the market begins to saturate. Growth is expected to be 10 percent in 2005, 7.7 percent in 2006, 6.4 percent in 2007, 4.8 percent in 2008 and 2.6 percent in 2009, according to the report.
In developed markets, growth will come from existing users replacing their handsets to gain new features.
“While technology has improved significantly to live up to the promise of many of these additional features, the challenge for the mobile handset market is to find the right balance between device costs, performance, network interoperability and style if many of these features and functionalities are to reach critical mass,” said David McQueen, ARC Group’s senior consultant and author of the “Future Mobile Handsets 2004-2009 report.”
“Handset manufacturers must be able to differentiate themselves from the competition by understanding the consumer groups they are targeting and gaining insight into consumers’ buying behavior. Customized handsets to suit the audience will become crucial to encourage further handset sales.”
The report also notes that global sales of third-generation handsets are weak worldwide except in Japan and South Korea. ARC Group said it does not expect 3G handset sales to increase before 2006. This year, 3G handsets account for only 4 percent of total worldwide mobile handset sales. ARC Group expects that percentage to rise to about 33 percent by 2009.<
