Demand for wireless gear will decline while subscriber numbers and handset sales will rise in 2003, according to a research report by U.S. Bancorp Piper Jaffray.
According to the forecast in a study titled “2003 Global Wireless Projections,” senior wireless equipment analyst Samuel May expects demand for wireless infrastructure to fall by 14.8 percent compared with industry projections of 10 to 15 percent, explaining that carriers will maintain their conservative postures in capital spending.
“Investment in W-CDMA equipment will continue to languish into 2004, as carriers seek validation for the demand of data services before moving forward with investments,” said May. “That said, we believe infrastructure spending will reverse its four-year decline and return to modest growth in 2005.”
The report said subscriber numbers will enjoy net additions of 165 million to 1.31 billion worldwide, representing a 14.3-percent increase year over year. May, however, expects net additions to fall to 140 million and worldwide subscribers to total 1.4 billion by 2004.
For handsets, the report expects a rise to 445 million, representing an 11.3-percent boost over 400 million last year. The highlight will be an uptake in replacements, which will improve to 24.3 percent compared with 21.2 percent in 2002 and 21.4 percent in 2001.
“The catalysts fueling replacements include the increased introduction of color handsets, embedded cameras, MP3 players and value-added features such as global positioning system and gaming,” said May. “Additional catalysts include the replacement of old, outdated phones, many of which are two-plus years old.”
