ABI Research anticipates that 4Q 2006 will prove a bumper quarter for mobile operators and mobile handset vendors. "The market topped 245 million mobile devices shipped in 3Q 2006 and the global mobile devices marketplace is on target to reach one billion devices by the year's end," said Jake Saunders, a research director at ABI Research. The analysts noted a steep decline in average sales prices as well as challenges in the 3G handset segment during the quarter.

Saunders said the handset vendors are pulling out all the stops to get their slickest, flattest, largest music memory, biggest mega-pixel camera phones onto the shelves in time for the 4Q 2006 holiday season.

The Gang of Five -- Nokia (36%), Motorola (23.3%), Samsung (12.5%), Sony Ericsson (8.1%), and LG (6.7%) -- all increased market share at the expense of the smaller handset vendors. Economies of scale, and marketing, it seems, are everything. "Initiatives such as super thin phones have helped manufacturers such as Samsung and Motorola gain market share, but Nokia's ability to pump out phones for the emerging markets, cut handset average selling prices (ASPs), and exploit its brand image have served to maintain, and even boost, Nokia's market share," said principal analyst Stuart Carlaw.

The net result of this scramble for market share has been lower ASPs. "The global weighted ASP dropped a steep -7.8% in 3Q 2006 compared to a 1.6% rise in 2Q 2006," said Saunders, "4Q 2006 is unlikely to fare any better. The competition is cut-throat."

3G handset shipment volumes proved to be a bit soft in 3Q 2006. 2.75G EDGE, which has been rolled out by a number of operators, has made the perceived performance gain of owning a 3G phone over a 2G GSM phone less distinct. Also, a number of vendors and operators are planning a big overhaul of their 3G phone line up for 4Q 2006. Recently Vodafone announced that it will be unveiling ten new phones for the festive season, six of which are 3.5G HSDPA-capable. HSDPA effectively "turbo-charges" the 3G experience. HSPDA will dramatically change the download experience for end users wishing to download music and games. The question is, will the turbo-charge kick in quickly enough?

About the market research study

The ABI Research data may be found in the "Mobile Devices Market Forecasts", that form part of the company'' Mobile Devices Research Service. This service covers Handsets, smartphones, PDAs, Mobile Multi-Media Platforms, Cellular PC Datacards, M2M Modules, and Ultra Low-Cost Phones, as well as operating software, applications, enabling components, and related air interface technologies.

» Story on Analyst Firm Website

» Comments   Digg this    del.icio.us Tweet This