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Market for mobile communications gear nears quarter-trillion-dollar mark

December 22, 2010 // Jean-Pierre Joosting

Market for mobile communications gear nears quarter-trillion-dollar mark

Propelled by the unstoppable cell phone market, worldwide factory equipment revenue generated by the mobile communications industry will near the quarter-trillion-dollar mark by the end of 2010, according to the market research firm iSuppli, now part of IHS Inc.

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Global mobile communications factory equipment revenue this year will reach $235.5 billion, up 7.9 percent from $218.2 billion in 2009, driven by the energetic expansion of mobile broadband in all parts of the world as well as by major increases in sales of 3G cell phones. Growth next year will be even more spectacular, iSuppli data show, when revenue surpasses the quarter-trillion-dollar level and hits $271.3 billion.

Continued revenue growth seems assured in the years ahead for mobile communications, a wide-ranging market encompassing cell phones, cordless phones, battery chargers, mobile infrastructure, mobile and fixed broadband access devices and wireless LAN equipment such as routers. By 2014, total mobile communications factory equipment revenue will reach $359.3 billion, as shown in the attached figure.

Among the various segments of the market included in iSupplis forecast, 3G mobile handsets this year will take up the largest share of revenue at $86.4 billion, up 34.6 percent from $64.2 billion in 2009.

Revenue is also sizable, although declining, in the older category of 1G/2G mobile handsetsstill a significant force in the emerging markets of Latin America, Asia and Africa. Revenue in 2010 for the combined 1G/2G category will fall to $55.6 billion, down 18.6 percent from $68.3 billion in 2009.

Revenue figures are much smaller in the latest-generation technology known as 4Ga category whose precise definition is in disputebut growth is highest in this segment. From a paltry intake of only $11 million in 2009, revenue is expected to skyrocket to $1.3 billion in 2010.

3G is still dominant; 4G ramping

Among mobile handsets, 3G continues to be the dominant technology in 2010 and likely will maintain that distinction beyond 2014, said Francis Sideco, principal analyst for wireless research at iSuppli. For their part, wireless carrierswhile wrestling with the issue of heavy data traffic on their networksare attempting to maximize investments in existing 3.5G and 3.75G technologies through incremental network upgrades. At the same time, carriers are deploying next-generation 4G technologies such as long term evolution (LTE), to begin in earnest by 2011.
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