The Commercial Market
1998 US Digital Handset Sales Surpass Analog
According to a recent report released by Dataquest, a unit of GartnerGroup Inc., US digital handset sales reached 10.1 million units through the first three quarters of 1998 compared to the sale of 7.9 million analog handsets during the same period. The report notes that the digital handset market was on pace to grow 170 percent in all of 1998. The analog/digital crossover signals the market+IBk-s protracted transition to second-generation digital telephones a full six years after their introduction in the US. Much of the digital handset market growth is attributed to the growth of the TDMA market. (TDMA handset sales are growing faster than CDMA and GSM 1900 sales in terms of both units sold and market growth.)
The crossover has impacted market shares of major suppliers dramatically. Ericsson, the 1997 leader with 41.3 percent of the market, has experienced a drop in shares to 21 percent during the first nine months of 1998 while Nokia, second in 1997 with a 20.6 percent share, has emerged as the market leader through September 1998 with its share rising to 40.3 percent. Motorola also has made progress as its sixth-position, 6.3 percent 1997 share rose to 11.5 percent in 1998 and placed it in third position in the market. Nokia+IBk-s growth is credited, in part, to the launch of its 6100 series telephones and its association with AT+ACY-amp+ADs-T+IBk-s Digital One Rate program. Motorola+IBk-s implementation of a strategy to diversify into all-digital product segments played an important part in its market share improvement. For additional information, contact Tom McCall, Dataquest (800) 419-3282 or (408) 468-8009, or e-mail: tom.mccall+AEA-gartner.com.
Study Examines US Mobile Service Handset Markets and Suppliers
In related news, a study from Strategy Analytics Inc.+IBk-s Mobile Communications Service North America, +ACY-quot+ADs-US Cellular Handset Market Status,+ACY-quot+ADs- forecasts that the market will be characterized by shrinking margins, demands for annual cost reductions of 15 to 20 percent and major shifts in market shares as the demand for digital models grows. The study predicts that the three major suppliers, Motorola, Nokia and Ericsson, will contend with strong competition from current second-tier suppliers, such as Samsung and Sony, who will succeed in gaining market share (taking particular advantage of Motorola+IBk-s delay in bringing product to the digital market). Third-tier suppliers are expected to enjoy only two or three percent market shares.
Second- and third-tier as well as new-entry suppliers will experience difficulties competing on any basis except price since the major producers offer much of the cutting-edge size/weight and talk/standby performance. For additional information, contact Kelly Quinn, Strategy Analytics (617) 738-1300 or e-mail: kquinn+AEA-strategyanalytics.com.
Wireless Automotive Control Module Introduced
Omega Research and Development Inc. has introduced the CommandLink+ISI- wide-area communications system, which enables drivers to control electrical functions in their automobiles from most locations. The system relies on Motorola+IBk-s one-way paging technology and permits the user to, for example, unlock his or her car door remotely by calling a toll-free telephone number or logging onto the Internet. Optional CommandLink accessories include equipment that can be installed on the automobile and activated remotely to start the engine, pre-heat or pre-cool the interior, engage horn or lights to assist in locating a vehicle or turn off the engine and inhibit its restart. For additional information, call (800) 724-3227 or visit the CommandLink Web site at www.pagecar.com.
AT+ACY-amp+ADs-T and Hughes to Deliver Wireless Office Service
AT+ACY-amp+ADs-T Wireless Services and Hughes Network Systems (HNS) have teamed to deliver the next generation of AT+ACY-amp+ADs-T Wireless Office Service (WOS) to US businesses. Under the terms of the agreement, AT+ACY-amp+ADs-T Wireless Services will provide wireless airtime/service to customers and HNS will supply a complete hardware, software and performance management platform through its AIReach+ISI- Office system.
AT+ACY-amp+ADs-T WOS provides the mobility of wireless communications and the functionality of a private telephone system. HNS+IBk- AIReach Office system includes a network of low power pico cells to provide wireless coverage throughout a building or campus area. The system also integrates the wireless capabilities with most personal branch exchange, Centrex or Key office telephone systems.
The system will operate in either 850 or 1900 MHz PCS frequencies using the IS-136 digital AMPS standard. Seamless handoff of either voice or data communications will occur between the AIReach Office system and the external wireless mobile network. Users will be able to make and receive calls and access all features of the private telephone system using a desk telephone or wireless telephone. A call delivery feature permits callers to dial one number and reach a party who is either in or out of the office. Shipments of HNS+IBk- AIReach Office system were scheduled to begin during the fourth quarter of 1998.
Reports Forecast Growth in Global Cellular and Latin American Markets
In its semi-monthly newsletter, Global Mobile, Baskerville Communications Corp. forecasts that the 1998 global cellular market will have exceeded 300 million subscribers. According to the newsletter, 22.3 million subscribers were added to the worldwide subscriber base during the second quarter of 1998 compared to 22 million during the first quarter and 15.2 million during the second quarter of 1997. Continued growth at the 1997 level would add 63 million subscribers in the second half of 1998, resulting in a global total of 312 million by the end of that year. However, the expected slower growth in Asia in the last six months of 1998 is likely to limit the growth of the total global subscriber base to 300 million.
Second-quarter 1998 growth was fueled strongly by the addition of 7.5 million subscribers in Western Europe, 33.7 percent of the global total. Asia-Pacific (excluding Japan) contributed 24.1 percent of the net new subscribers followed by North America with 14.3 percent, Japan with 11.4 percent, Latin America with 6.6 percent, the Middle East with 3.5 percent, Central and Eastern Europe with 3.4 percent and Africa with 3.2 percent. Prepaid services are credited with attracting 30 to 40 percent of the net additions in a number of markets.
In a separate study, +ACY-quot+ADs-Latin American Telecom Markets,+ACY-quot+ADs- Baskerville Communications analyzes industry growth in 18 Latin American countries and forecasts the growth of fixed and mobile telephone service in the region through 2007. Fixed lines in service are forecast to double from 50 million in 1997 to 100 million by 2007 with penetration increasing from 11.9 percent in 1998 to 19.1 percent in 2007. In addition, the mobile service subscriber base is expected to experience spectacular growth from 11.9 million in 1997 to 72 million by 2007. Mobile penetration also is expected to increase from four percent in 1998 to 14 percent in 2007. Although price competition will prevent revenues from rising in step with the subscriber bases, total telecom revenues are expected to increase from +ACQ-49.3 B in 1998 to +ACQ-81.4 B in 2007. Argentina, Brazil and Mexico are expected to account for a majority of contributions to the region+IBk-s growth, representing two-thirds of the fixed line capacity increase and three-quarters of the mobile growth.
Brazil+IBk-s contribution is expected to include a revenue growth from +ACQ-18.4 B in 1998 to +ACQ-29.5 B in 2007. For additional information, contact Baskerville Communications at 171-299-4500 or visit the company+IBk-s Web site at www.baskerville.co.uk.