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Smart Phones And Tablets Still Drive Growth

Dec. 27, 2011
Mobile communications devices continue to drive electronics industry growth, spurred by increasing demand for 3G and 4G handsets

As 2011 came to a close, industry watchers were predicting strong growth in the mobile communications device market, continuing a trend they expect to last through 2015. Demand for communications devices themselves, particularly media tablets and 3G and 4G handsets, along with the infrastructure and equipment needed to handle the increased data consumption they generate is expected to keep the wireless communications market humming for some time.

Growing consumer interest in smart phones and tablets is at the heart of the trend, leading to nearly 30% growth in the mobile communications device market in 2011, according to an IHS iSuppli Wireless Communications Market Tracker report released late last year. That percentage exceeds the segment’s robust 19% expansion in 2010 and is higher than any future projected increase until at least 2015.

The news should come as no shock to industry watchers, says Dale Ford, vice president of IHS iSuppli, pointing to the growing competitive landscape for media tablets, along with consumer demand for high-data-rate handsets supported by 4G technology.

The 3G handset sector was the largest contributor to growth in the mobile communications devices market in 2011. But the fastest-growing segments were media tablets, up 217% to $36.5 billion, and 4G mobile handsets, up 187% to $4.6 billion.

“The 3G handset segment will continue to account for the largest share of mobile device revenue in the next few years, with revenue starting to decline in 2015,” the report said.

“Meanwhile, the 4G standard known as Long-Term Evolution (LTE) is set to dominate infrastructure spending among wireless carriers in the devel­oped world by 2013. Global carrier infrastructure spend on LTE will grow from $2.05 billion in 2010 to $36.4 billion in 2015, with the market favoring vendors that can deliver cost-effective, upgradable solu­tions with the high speeds called for by the next-generation wireless standard,” it continued.

But there will be growth in low-end mobile communications devices as well, particularly in emerging regions of the world where demand is increasing for entry-level phones used mainly for voice communication. Strong subscriber growth is expected in markets such as China, India, South Asia, and Africa, for instance. Worldwide sales of mobile devices increased nearly 6% in the third quarter of 2011, according to a Gartner Inc. survey, which also pointed to strong demand in emerging markets for low-cost devices.

As a result, handset manufacturers will need to provide phones that meet both the low- and high-end spectrum of the market, IHS points out.

Aside from growth in the media tablet and smart-phone segments of the market, analysts predict growth in battery chargers for cell phones, handsets classified to the underground illegal gray market, along with mobile broadband and wireless access equipment such as basestations, routers, mobile hotspots, and USB dongles. The semiconductor market for mobile communications is also pegged for healthy growth, having increased 16% to $69 billion last year, according to the IHS Market Tracker report.

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