A story on the Barcelona GSM World conference had this interesting summary on the state of the handset market. With our focus on infrastructure we have not written much about handsets over the years, but it’s becoming difficult, especially in the context of the Mobile 2.0 narrative. As I said in a recent interview with the Expanding Horizons magazine: “Mobile networks will provide the key connectivity, especially as we see handsets becoming more advanced.” Global shipments of handsets had been falling every quarter since the third quarter of 2008, when the global financial crisis erupted, according to market research firm Strategy Analytics.
Findings from LIRNEasia’s Teleuse@BOP3 study have been cited in the latest issue of Nokia’s Expanding Horizons magazine. The article discusses the vast potential mobile phones have for providing those on the lower-incomes or the bottom of the pyramid, access to the internet for the first time. Read the full article here. Excerpt below: According to ICT policy think tank LIRNEasia, the evidence shows that mobiles, not computers, have the best potential to deliver services to rural areas in the Indo-Gangetic Plain, the world’s largest concentration of poor people. “This is the hardest case.
What I like about the new economy is that no one is king of the hill for too long. IBM, the target of Apple’s famous 1984 ad, almost went under and reinvented itself as an open source champion for the comeback. Microsoft is no longer looking like a big bad bully. And Nokia who seemed to own the mobile space is scrambling. It is getting hammered not only in the network equipment space (where the alliance with Siemens did not do much good) but in the main game which is handsets.
Helani Galpaya, COO of LIRNEasia, was invited by the Strategic Affairs Directorate to speak at a seminar on Alternatives for Infrastructure Development and Broadband Access. Brazil is embarking on an ambitious program to increase broadband penetration, and is currently discussing various options – one of the more interesting being the provision of a government-owned backbone, using the dark fibre that is currently owned by the electricity and petroleum companies. The pros and cons of this, and other options were discussed at the seminar, and a the full day of closed-door discussions that followed between the speakers and the Strategic Affairs Directorate staff. Helani focused on the importance of thinking about the market structure (whether or not there was sufficient competition at all points in the network) and demand stimulation. For example, Nokia’s TCO study shows that Brazil has the highest cost for mobile users among all the countries studied (possibly driven by highly asymmetric interconnection rates and lack of sufficient competition, among other things).
Teleuse@BOP3, LIRNEasia’s six country study has shown that between 2006 and 2008 there has been significant uptake of mobiles by the BOP in emerging Asia. Access to computers on the other hand (see here for numbers) in these countries at the BOP is minimal. Together with the increasing capabilities of mobiles to deliver an array of services, which essentially boil down to what you can do on the Internet (information publication and retrieval, transactions, etc) this means that much of the BOP will have their first Internet experience through a mobile. The current issue of Nokia’s Expanding Horizons quarterly magazine highlights LIRNEasia’s Teleuse@BOP3 study findings from India, illustrating this point. Mobiles are now the most common form of communication, pushing public phones into second place… The rapid evolution of the mobile into a multi-purpose communications and knowledge tool combined with its fast adoption by the BOP, means they and the majority of people in the developing world are likely to have their first Internet experience via a mobile.
Nokia, the leading mobile handset maker, is experiencing the effects of the global economic crisis. But Asia is showing the lowest declines. In the three months through March, the company said its profit declined to 122 million euros ($162.3 million) from 1.2 billion euros a year earlier.
Last year, several LIRNEasia researchers were pleased to work with Nokia on explaining the reasons behind South Asia (Bangladesh, India, Pakistan and Sri Lanka) being the only countries with a TCO [total cost of ownership] below USD 5/month, when the average for almost 80 countries studied was USD 13.15. According to the latest issue of Nokia’s Expanding Horizons magazine (p. 10), the TCO has come down further, to USD 10.88.
A wave of economic gloom is expected to hit mobile phone buyers next year, and more and more analysts predict the once-buoyant market will shrink for the first time since the 2001 crash, a Reuters poll shows. On average, analysts expect global growth to be 3 percent in both the fourth quarter and in 2009, compared with well above 10 percent in recent years. Eight out of 22 analysts said they expected the market to contract next year. In a similar poll just a month ago, only one analyst out of 23 expected 2009 market sales volumes to fall, and then only slightly. For the fourth quarter, analysts expect the market to grow 11.
Gadget Maker or Service Provider? Firms Start to Overlap – New York Times “Devices alone are not enough anymore,” Olli-Pekka Kallasvuo, chief executive of Nokia, said last week in London as the company announced plans for a digital music store, a game service, social networking links and other mobile Internet initiatives, grouped under a new brand, Ovi. “People want more; they want the complete experience.” Meanwhile, a Google spokesman declined to comment on reports that a “Google phone,” or “G-phone,” was imminent. Such a device would take the Internet company into a business that has long been dominated by Nokia, but that has been shaken up by the recent introduction of a high-profile newcomer, Apple’s iPhone.
Sales in Emerging Markets Help Nokia Add to Its Cellphone Lead – New York Times Nokia sold 100 million mobile devices in the period, an increase of 29 percent over 2006, while the overall industry growth was about 14 percent, with 262 million mobile devices sold globally, Nokia said. But the group again warned about the performance of its troubled network operations, describing market conditions as challenging because of heavy competition. “We shall have to increase the amount and speed of cost cutting,” the chief executive, Olli-Pekka Kallasvuo, said, giving no details. The greatest growth in Nokia’s handset sales, 37 percent, was in the Middle East and Africa, it said. But at 36 percent growth, sales were also strong in the Asia-Pacific region and in China.
The Business Standard (Nokia focuses on rural markets) Sapna Agarwal / Pune July 16, 2007The rural markets account for around 5 per cent of the national GSM (Global System for Mobile Communication) handset sales. The figure is expected to rise to 25-30 per cent, adding around 100 million new cellular subscribers by 2009, according to a recent study by LIRNEasia and AC Nielson.
Most Indonesians access the Internet primarily using fixed wireline infrastructure, mostly dialup. Because of lack of competition in the fixed line sector due to various reasons fixed line growth has been stagnant which has also affected Internet growth in the country. Not only are no new lines being added to bring more homes online, the inadequate backbone infrastructure in large swathe of the country makes deployment of broadband services unviable even if incumbent’s local loop bottleneck could be bypassed. However, yesterday’s Wall Street Journal (March 15, 2007) seems to suggest that high speed 3G wireless technology like HSDPA can bring broadband on a large scale to Indonesians. It (misleadingly) implies that since HSDPA is merely a software upgrade to 3G networks it will not require any new major telecom infrastructure investment in Indonesia.
Later this year, T-Mobile plans to test a service that will allow its subscribers to switch seamlessly between connections to cellular towers and Wi-Fi hotspots, including those in homes and the more than 7,000 it controls in Starbucks outlets, airports and other locations, according to analysts with knowledge of the plans. The company hopes that moving mobile phone traffic off its network will allow it to offer cheaper service and steal customers from cell competitors and landline phone companies like AT&T. “T-Mobile is interested in the replacement or displacement of landline minutes,” said Mark Bolger, director of marketing for T-Mobile. Wi-Fi calling “is one of the technologies that will help us deliver on that promise.” Major phone manufacturers including Nokia, Samsung and Motorola are offering or plan to introduce phones designed for use on both traditional cell and Wi-Fi networks.
http://www.cellular-news.com/story/17101_print.php The GSM Association recently announced that its Emerging Markets Handset program is exceeding expectations: mobile operators in Bangladesh, China, India, and Russia have already purchased 12 million of its Ultra Low Cost Handsets (ULCH). But will the initiative reach the rest of the three billion unconnected peoples in emerging markets?