Four Factors that Will Set the Mobile Market

Carl Weinschenk
Slide Show

The Evolution of Mobile: A Cultural Game Changer

Four data points—actually three, with the one likely to occur soon—paint an interesting picture of the state of the mobile sector.

The most striking is that for the first time, more smartphones were sold than feature phones. This is an imprecise measure because the line between the two is fuzzy and likely placed at slightly different points by each firm that makes its money sorting the winners from the losers.

Nonetheless, this is an important global transition. Gartner reports that during the second quarter of 2013, smartphones represented 51.8 percent of the phones sold. Growth of smartphone sales was highest in Asia/Pacific (74.1 percent), Latin America (55.7 percent) and Eastern Europe (31.6 percent), according to the firm.


The second point—it isn’t truly a data point yet, since it hasn’t happened—is that data is about to surpass voice revenue in the U.S. mobile industry. In his latest market update, analyst Chetan Sharma said that mobile data revenues for the second quarter were $21 billion. Growth was 4 percent against the previous quarter and 14 percent more than the year-ago quarter. The cross-over point between data and voice revenue in the U.S. is likely to be reached later this year, Sharma predicts.

The third data point—one that I posted about last week—is that Microsoft’s Windows Phone is showing signs of life. Strategy Analytics and IDC pointed to growth. Both firms saw a percentage of a tad less than 4 percent for the phones. That’s not too much—but better than where it had been.

The fourth data point is that BlackBerry is slowly saying goodbye. The company announced that it has formed a committee to explore finding a strategic alternative. Wrote Forbes’ Abram Brown:

The committee will review possible joint ventures, partnerships or an outright sale of the company. Any option chosen should quicken the development of BlackBerry’s new software, the BlackBerry 10, says the Waterloo, Canada-based company.

The third and fourth points are interrelated, since BlackBerry and Microsoft are vying to be the “go-to” third mobile operating system. ZDNet’s Mary Branscombe compared the approach of the two and found that Microsoft ended up on top by making sounder and timelier tactical decisions concerning products that are not too dissimilar.

The four points aren’t linear: The strength of smartphone versus feature phone sales and the strength of data versus voice revenue are independent trends. The fact that Windows Phone ticked up and BlackBerry down also are independent, since it is not a zero-sum game: Both, for instance, could have gained because the entire segment is growing and/or by taking market share away from Android and/or iOS. Likewise, they both could have lost ground.

As the summer begins to wind down and the industry begins preparing for the holidays, these trends—with the continued strength of Android thrown in as a constant—will set the contours of the market: More data, more smartphones, a bit more Microsoft and a radical new reality for BlackBerry (or pieces of it that have been auctioned off).



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