Monday, April 8, 2002
1 billion is undeniably 1 billion
Posted by Andy Sjostrom in "THOUGHT" @ 01:38 PM
The analyst firm Emarketer provides some food for thought. More than 1 billion cell phone users by this summer, they say. 392 million use prepaid subscriptions. The largest cell phone market is China with 149 million subscribers.
Here are my random thoughts from a general mobile devices market perspective:
1. Believe in volume over price? Go to China! (Perhaps a Chinese version of Chopper Alley? Kidding.)
2. As phones are getting smarter, the smart phone market is where wireless connectivity will find most number of users. Connected PDAs with built-in phone circuitry will be "just" the top 2-5 percent - absolute maximum. Microsoft Smartphone will play a key role in this market.
3. The current Palm vs Pocket PC battle is close to irrelevant, in terms of number of units. Look at the graph below. It shows the number of cell phone, Palm and Pocket PC users. The market share difference between the two platforms is hard to tell, heh? Wireless connectivity will differentiate. Pocket PC Phone Edition has the upper hand today.
4. How many percent of the 1 billion should be considered as "interesting" for a cell phone platform/device maker? Is 100 million users enough? That would be "just" 10 percent, you know...
5. Extrapolate that kind of volume into the near future and ask yourself: is this market bound for commoditization? I would say it is, and add that that statement is today's understatement. Lower margins drive higher volume and vice versa. Nokia's business model is being threatened in the same way IBM's was in 1986/1987.
There you have it! What do you think?
Here are my random thoughts from a general mobile devices market perspective:
1. Believe in volume over price? Go to China! (Perhaps a Chinese version of Chopper Alley? Kidding.)
2. As phones are getting smarter, the smart phone market is where wireless connectivity will find most number of users. Connected PDAs with built-in phone circuitry will be "just" the top 2-5 percent - absolute maximum. Microsoft Smartphone will play a key role in this market.
3. The current Palm vs Pocket PC battle is close to irrelevant, in terms of number of units. Look at the graph below. It shows the number of cell phone, Palm and Pocket PC users. The market share difference between the two platforms is hard to tell, heh? Wireless connectivity will differentiate. Pocket PC Phone Edition has the upper hand today.
4. How many percent of the 1 billion should be considered as "interesting" for a cell phone platform/device maker? Is 100 million users enough? That would be "just" 10 percent, you know...
5. Extrapolate that kind of volume into the near future and ask yourself: is this market bound for commoditization? I would say it is, and add that that statement is today's understatement. Lower margins drive higher volume and vice versa. Nokia's business model is being threatened in the same way IBM's was in 1986/1987.
There you have it! What do you think?
