The Mobile & Wireless Industry continues to undergo serious long-term changes in business landscape, influenced by rapid technological advances and preferences of corporate customers and end-users. Mobile communications is expanding into new geographical markets with diverse characteristics and dynamics, operator demands in mature markets are becoming more sophisticated with the advent of new multimedia services, and businesses are becoming increasingly mobile.
The global mobile subscriber base crossed 2.5 billion in 2006, and estimate will reach 3 billion during 2008. Growth is particularly strong in the high-growth markets of the Middle East, Africa, Latin America and South Asia. In these markets, the ability to offer tailored mobile network solutions and devices that reduce the total cost of ownership is an important competitive advantage.
By end 2005, a total of 100 operators had launched commercial 3G/WCDMA services, and the uptake of 3G/WCDMA continued to increase during 2006. This was largely the result of attractive pricing of services, the further maturity of 3G/WCDMA technology, and the greater availability of 3G/WCDMA handsets.
We are seeing continued trend towards industry consolidation among component suppliers, networks and device manufacturers, and operators. There is evolving consumer interest in non-cellular wireless technologies such as wireless local area networks, or WLAN (including WiFi), Worldwide Interoperability for Microwave Access, or WiMAX, and Voice over Internet Protocol, or VoIP. Depending on how customer interests develop, these technologies could migrate to mobile communications and complement traditional cellular technologies.
As a player in this industry, your sales and profitability depend on the continued growth of the mobile communications industry as well as the growth and profitability of the new market segments within the industry that you target.
The telecom industry continues to undergo significant changes.
(1) The mobile communications, information technology, media and consumer electronics industries are converging in some areas into one broader industry leading to the creation of new mobile devices, services and ways to use mobile devices.
(2) While participants in the mobile communications industry once provided complete products and solutions, industry players are increasingly providing specific hardware and software layers for products and solutions.
As a result of these changes, new market segments within the industry have begun to emerge which need significant investments in certain new market segments, such as smartphones, imaging, music and games in mobile devices, and enterprise mobility infrastructure as well as managed services, systems integration and consulting businesses in the infrastructure business.
However, a number of new market segments in the mobile communications industry are still in the early stages of development, and it is difficult to predict which new market segments are the most advantageous for a given company to focus on.
One of the biggest executive decision points is the timing of launching new products to meet customer requirements and preferences, while taking into account the availability of competitors’ products.
The mobile communications industry is at different stages of development, and many of the target markets have different characteristics and dynamics, for example, in terms of mobile penetration rates and technology, feature and pricing preferences.
Certain mobile network operators require mobile devices to be customized to their specifications with certain preferred features, functionalities or design and co-branding with the network operator’s brand. Such customization is an important element in increasing business, and requires joint product planning, as well as accelerating product hardware and software customization schedules.
Past performance in established market segments does not guarantee success in these new market segments. The big threat to established companies like Nokia, Motorola, Samsung comes from new players like Apple (eg. iPod) and other players we haven’t heard yet. Failure to identify key market trends and to respond timely and successfully to the needs of customers may have a material adverse impact on market share and business operations.
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