Mobile Handset Devices Industry Outlook 2010

With about 29 days left and the Q1 2010 ends, Let’s analyze what the mobile industry has to offer in the near future, summarizing the learning from the products lined up at CES 2009 and MWC2010..

• Mobile handset industry growth was flat in 2009 at nearly 1.14 billion devices in sales but the silver lining was the smartphone category which grew to nearly 174 million devices from a base of 139 devices contributing to approximately 15% of the total handset sales .
• Smartphones category will continue to grow with a year on year compounded growth @24% with 30% YOY growth as of last year
• Smartphone Operating system will be the differentiating factor coupled with services based business model for the devices vendors. Android, Windows Mobile 7 will fight with MacOSX and Symbian to offer a compelling User Experience. Linux based platforms will dominate this year.
• Watch out for incumbents like Nokia, Samsung, LG facing a fierce competition from smartphone entrants Android baseddevices (HTC), PC vendors (HP,Dell) and infrastructure providers(Huawei, ZTE) coming up with their own device portfolio
• Digging in terms of content and apps, location based social networking, gaming and search applications will dominate this year and there will be an increasing trend of users paying for the application downloads.
• The App store wars continues with operators also pooling in together to have a piece of this pie to support their ever declining margins and expanding horizons for their limited revenue sources. Industry will start witnessing more of mobile web-based apps compared to the existing tsunami of device based apps in the app stores.
• The primary focus considering handset design will be on providing an intuitive mobile web surfing experience at the same time integrating top social networking tools and additional hardware and software enablers like productivity tools, QWERTY keyboards, pico projectors, HD quality videos, better cameras, VOIP features, etc.
• The technologies which might bring new abilities to the mobile devices  would be Near Field Communications (mPayments, mBanking with advent of companies like Square and mAdvertising) focusing on contactless payments, advertising, marketing.Mobile phone-based contactless payments will facilitate over $36 billion of worldwide consumer spending by 2011
• The other trend to monitor is the chipsets industry which will be the heart of the mobile devices in powering the devices and integrating numerous features aligning to different form factors and operating system platforms out there striving to achieve peak performance vs lowest power consumption parameters. Qualcomm’s Snapdragon, Intel’s Atom, TI OMAP and Nvidia’s Tegra will drive the sea of 3G devices with a new tussle going on for the 4th Generation LTE & WiMAX chipsets development among the chipsets vendors primarily Altair Semi, Comsys, Wavesat,etc.
• There is going to be a wave of tablets/e-readers following the success of Kindle, hype of iPad,  lots of Android based tablets will be launched in later half of the year and with many content providers like Magazine/Newspaper giants jumping in the bandwagon.
• 3G penetration worldwide is just 11% with Japan, North America, Korea and Western Europe with maximum penetration (more than 40%). So for smartphones vendors to succeed, a strong operator relationship is going to be an important factor backed by a differentiated and stronger product portfolio and a stronger service model. Industry will learn from Nokia’s failure in North America and Google Nexus’s Service and Support fiasco post launch.

In all a very interesting year ahead for mobile devices industry.

In the next part we will outline insights from wireless operator’s industry..