Evolution of Mobile Handsets to 2011 And Beyond: Market Analysis And Forecasts

• How will mobile handsets evolve in the next five to ten years worldwide?
• How does increasingly segmented consumer service demand impact on the future handset market?
• What are key success factors for the consumer acceptance of future mobile handsets?
• How should handset vendors compete more effectively and efficiently in the future handset market?
• How should mobile operators utilise future handsets to attract customers and improve their ARPUs?
• What is the size of handset shipments between 2005 and 2011, broken down by different types of handsets and by regions?

• Handset vendors: executive management, research and development and product marketing can understand future trends in handset evolution, the underlying drivers of consumer demand and key success factors for the consumer acceptance of future handsets in order to prepare their investment and plan their product roadmaps.
• Mobile network operators: partner vendor managers can develop their vision of handset development with other players in the handset value chain and utilise the full potential of future handsets in order to attract customers and improve ARPUs.
• Mobile MVNOs: can understand the future trend in handset segmentation in order to enhance their positions and compete more effectively with established mobile operators in the market.
• Handset component suppliers: can anticipate the evolution of their customers’ needs for handset components and gain insights into the strategies of handset vendors and mobile operators in order to co-operate more effectively in the preparation of future product portfolio and roadmaps.
• Handset software application developers: can understand the underlying factors driving the design criteria for handset operating systems, user interfaces and applications and anticipate the relative impact of messaging services, information downloads and entertainment demands on operator and vendors requirements for handset software.
• Consumer electronics and IT manufacturers that have a strategic interest in the mobile phone market: can identify potential partners and competitors in the design and manufacture of future mobile telephony devices and understand how they can position their manufacturing expertise in order to capitalise on the demands for integrated imaging, music, video, gaming and specialist functionality in handset designs.
• Industrial designers: can understand the factors that are shaping form factor, design and aesthetics in handset design and gain an overview of the technological parameters (such as battery life and application functionality) that are critical in designing an effective handset.
• Retailers: corporate, financial and procurement managers can anticipate future trends in mobile handsets, and establish criteria that trend spotters and buyers will use to identify ‘hit’ products before their launch and purchase appropriate stock from handset vendors, enhancing their supply-chain and inventory management.
• Investor and financial analysts: can understand the evolving handset market in order to make the correct investment decisions

1 Handset evolution is a strategic issue for operators, not just vendors

1.1 Vendors need to identify new opportunities for growth to combat the recent deceleration in global handset shipments

1.2 Mobile handsets are also key to operators’ performance

1.3 The report examines three broad categories of handset

2 Voice-centric handsets will remain a sizeable product category, especially in emerging markets

2.1 Voice-centric handsets will still constitute the largest share of shipments in emerging markets during the next five years

2.2 Voice-centric handsets will also continue to appeal to certain consumer segments in developed economies

2.3 Some current voice-centric handsets indicate success factors for future handsets

2.4 Key success factors in the voice-centric handset market will include price, design, the user interface and enhanced functionality

2.5 Mobile operators need to ensure healthy profit margins from voice-centric handset users

3 Converged-function handsets will become the mainstream device in the majority of developed markets

3.1 Consumers are increasingly demanding a single mobile device that incorporates a range of applications for everyday use

3.2 Smartphones are well placed to play a pivotal role in the future converged handset market

3.3 Handset vendors will have to enrich functionality, improve usability, enhance design and extend technological capabilities

3.4 The converged-function handset will have to drop to a mid-range price in order to become a mainstream product

3.5 Mobile operators and handset vendors need to co-operate in order to propel converged-function handset adoption and improve data revenues

4 Specialist handsets offering a best-in-class experience will win in particular consumer segments

4.1 Consumers are diverging into a multitude of market segments with specific needs for handset functions

4.2 Handsets offering specific, best-in-class experiences will win in particular consumer segments

4.3 Mobile operators and handset vendors need to incorporate a strategy of differentiation to raise brand awareness and enhance customer loyalty

5 Annual global handset shipments will reach 1.5 billion by 2011

5.1 The forecasts use system dynamics to better estimate handset shipments

5.2 Converged-function handsets will become a mainstream product category in Western Europe and developed Asia, while a range of specialist handsets will lead in volume by 2011

5.3 Voice-centric handsets will still account for the largest proportion of mobile handset shipments in North America in 2011

5.4 Voice-centric handsets will still constitute the largest product category in emerging markets in 2011, although shipments of other handset types will grow quickly Actions

Figures and Tables

Figure 2.1: Handset shipments in emerging markets, 2001-11

Figure 2.2: Forecast of voice-centric handset shipments in emerging markets, 2005-11

Figure 2.3: Forecast of voice-centric handset shipments in developed markets, 2005-11

Figure 3.1: Forecast of mobile service ARPU by service categories in Western Europe, 2005-11

Figure 4.1: Global annual operator revenues for email and IM, 2005-10 (Source: Analysys Research, 2006)

Figure 5.1: Global handset shipments by three types, 2005-11

Figure 5.2: Shipments by handset type in Western Europe, 2005-11

Figure 5.3: Shipments by handset type in developed Asia, 2005-11

Figure 5.4: Shipments by handset type in North America, 2005-11

Figure 5.5: Shipments by handset type in developing Asia, 2005-11

Figure 5.6: Shipments by handset type in Central and Eastern Europe, 2005-11

Figure 5.7: Shipments by handset type for the rest of the world, 2005-11

Table 2.1: Some successful voice-centric handsets

Table 2.2: Retail price estimates for handsets in emerging markets

Table 3.1: Examples of successful converged-function handsets

Table 3.2: Prospective features of a future converged-function handset

Table 4.1: Major market segments for specialist handsets, worldwide

Table 4.2: Examples of mobile-music handsets

Table 4.3: Examples of selected mobile-imaging handsets

Table 4.4: Examples of mobile-email handsets

Table 4.5: Examples of mobile-gaming handsets

Table 4.6: Selected mobile sports handsets

Table 5.1: The regions covered by the forecast