Wireless Devices Continue to Proliferate

More than 483 million wireless devices will be sold to end-users in 2003, and one-third of the world’s population will own a wireless device by 2008, according to The Strategis Group.

New generation technology is driving demand for wireless phone handset replacements. The market for replacement rates is projected to reach 36 percent in 2002, Strategis found. Handset sales overall will be up 17 percent globally, and markets in China and Southeast Asia will grow by nearly 40 percent.

“We’re projecting that handset replacement rates will rebound dramatically in 2002, fueled by end-users who are increasingly ready to migrate to next-generation devices,” said Ozgur Aytar, a wireless market analyst with The Strategis Group. “Next-generation services, such as multimedia messaging (MMS), will drive this consumer demand at least into 2003. MMS will be the next-generation chat room that will help fuel demand for advanced handsets. Short messaging services (SMS) and i-mode have only wetted the appetite of consumers for the capability that MMS can deliver.”

Upgrading existing wireless devices will be crucial if the number of wireless Internet users is to live up to estimates. According to The Intermarket Group, 36 percent of Internet users will employ wireless handset devices for access and 59 percent are expected to use non-PC devices, including handsets, PDAs, email appliances and other types of Internet-enabled appliances — both wired and wireless — by 2005.


Mobile Wireless Internet Users
(millions)
Region 2000 2005
North America 2 89
Europe 7 194
Latin America 0.1 52
Asia-Pacific 30 79
Worldwide 39 729
Source: Intermarket Group

Intermarket predicts the number of mobile wireless Internet users is expected to expand 18-fold, from approximately 39 million worldwide at the end of 2000 to approximately 729 million in 2005. The fastest growth will occur in Latin America, where the small base of existing users should expand more than 500-fold. The number of users in North America will expand more than 40-fold during the same period and the Asia-Pacific region roughly 12-fold. Approximately 80 percent of today’s mobile wireless Internet users are in the Asia-Pacific region, due primarily to the success of NTT DoCoMo which has grown to nearly 26 million users since its launch in 1999.

Exactly how consumers will find value in wireless Internet access and how service providers will find profits has been a long-running debate in the wireless industry. According to Intermarket, the biggest wireless opportunities are likely to be found in adding value to existing business processes rather than in m-commerce or selling products and services via PDAs and WAP handsets.

Among the Web sites of leading companies, 26 percent already have “mobile friendly” features or planned to implement them. The number increases to 29 percent among those Web sites which are e-commerce enabled. Among the companies that have invested in wireless initiatives that target consumers are America Online, eBay, E*Trade and Travelocity.com.

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