Cell Phones Rising

By 2009, consumers worldwide will be buying mobile phones at a rate of 1 billion per year. But the pressure will be on vendors because wholesale costs are set to decline.

The mobile phone forecast, published this week by research firm Gartner Group, also reports that there will be 2.6 billion mobile phones in use by 2009.

Gartner raised its 2005 forecast for mobile phone
sales to 779 million units, an increase of 16 percent over 2004. As recently as May, Gartner revised its 2005 mobile phone sales forecasts from 720 million to 750 million units, which is a 13 percent increase over 2004.

The Asia-Pacific region is forecast to lead the growth rate during the next four years. The region also represents the greatest volume of sales at 203.8 million units in 2005, which Gartner forecast growing 17.6 percent to 390.1 million units by 2009.

North American sales volumes are forecast at 150.1 million units for 2005
growing to 178.8 million units by 2009 (a 4.5 percent growth rate). Globally, Gartner forecast mobile phone sales will grow
by 7.5 percent in the 2005 to 2009 period, marking a decline
from the 12.9 percent growth recorded in the 2000 to 2004 period.

Garter expects users in the mature North American and European markets to buy replacement phones while new user adoption is increasing in newer markets like India and Brazil.

The fastest growing category of mobile phones is the smartphone category,
according to Gartner. The research firm breaks out smartphones into two
categories. Basic smartphones, which are customer focused devices marketed
primarily as multimedia devices (music, pictures, gaming, and e-mail).

Enhanced smartphones are enterprise or “prosumer” focused and include more
extensive capabilities like PIM synchronization and include at least 64MB
of either removable or embedded storage.

In 2005, Gartner forecast that 40.9 million basic and 12.4 million
enhanced smartphones will be sold. By 2009 the basic smartphone category
will grow by 44.9 percent to 180.2 million units, while enhanced smartphones
will grow by 67.9 percent to 98.5 million units.

Though sales are forecast to grow over the next four years, Gartner also
expects that the average wholesale price will fall to $161 in 2009 down from
$174 in 2005.

“Sales numbers are impressive, but the big names in this industry will
have to deliver value as well as volume,” Ben Wood, research vice president for mobile terminals at Gartner in a statement. “At the
same time, phones will keep getting more complex and become ever-more packed
with features. Only the sharpest players will survive.”

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