Market Update: Arrow Electronics Acquires Cross Telecom

Carl Weinschenk

The one thing that can be said of the cell phone industry is that it is changing. There is nothing new about that idea. The fact that those changes are well entrenched, fundamental and ongoing is reinforced in recent sales numbers.

 

According to a NPD report, U.S. sales are down -- not surprising considering the economic climate. NPD says that people who are buying are opting for higher-priced, feature-rich devices. The big sellers are phones with QWERTY keypads. Smartphone sales rose to 19 percent of mobile phone sales, a 9 percent increase over the year-ago quarter.

 

The migration of the world to smartphones in general and the iPhone in particular is evidenced by predictions from both Turner Investments and Piper Jaffray that the Apple device could capture 28 percent of the smartphone market by next year. This report at Macworld says the iPhone controlled only 3.7 percent of the market last year (which, of course, was its first on the market). The story cites research from Nokia that says smartphone sales increased 40 percent in the second quarter, while all handsets moved up 15 percent.

 

The trend toward higher-priced phones was also apparent this summer from IDC and during the spring from J.D. Power and Associates. Internetnews.com mentions the J.D. Powers report, but focuses on IDC's more recent numbers. Perhaps the most striking note is that IDC sees a 40 percent year-over-year increase among what the writer terms "the high-end mobile device segment." Touch screens, GPS and Wi-Fi are the most popular features of the higher-end phones, the story says.

 

A beneficiary of the move of consumers into the smartphone space clearly is Research in Motion, which was prescient in the introduction of several of the earliest consumer models. A Strategy Analytics' study says that the BlackBerries' share of the U.S. market hit 11 percent during the second quarter. According to the report, the dynamic in the U.S. and elsewhere differs. In the states, RIM and BlackBerry are ahead, while Nokia is the smartphone leader elsewhere.


 

Numbers don't lie. The inexorable trend is toward smartphones and feature phones. This is only the beginning of an interesting story that will become even more compelling during the next few years. The structural landscape of the industry is in the process of an overhaul with the emergence of Android and the LiMo consortia, the move of Symbian to open source and the opening of carrier networks.



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