As we rapidly close the cover on one of the toughest years the telecommunications, content and internet industries have ever seen, SA takes a look ahead beyond the recession to detail the key megatrends for the mobile industry in 2010.
We see a tough but positive mobile ecosystem outlook with devices recovering stronger than services. More consolidation is likely among network operators, while profits for device vendors will continue to flow away from handset only vendors in favor of device/services integration specialists. Emerging markets will continue to dominate volume with strong 3G rollout competition expected. The global market for services, applications, devices and infrastructure will post modest growth of approximately 3% in 2010.
The total mobile industry revenue including services, infrastructure and devices was flat in 2009. We expect a modest growth of 2.8% in 2010 to $1140B.
· In 2009, only strong growth in data spends by users ensured that total industry revenues did not decline. Data revenues grew 9.5% in 2009 and are expected to grow at a 13% rate in 2010 reaching over $200B.
· Handset market sell through revenue will rebound well in 2010, posting growth of 4% while the infrastructure market will continue to struggle and will decline slightly.
Key issues shaping the 2010 landscape include:
- Operators needing to balance the the strong rise in Capex requirements driven by the data traffic explosion against slow revenue growth. The likely outcome being significant M&A, network sharing and even applications development.
- Handset OEMs will be forced will put the early stake in the ground for new device categories. Traditional OEMS will continue to struggle to match the Apple & Google vertical integration strategy which has proven so successful.
- As the big five vendors focus on smart phones and content/services in the open markets, a race develops to get services/apps onto feature phone products or other operator customized devices
- On-portal traffic continues to grow but is outpaced by off portal session growth. Contextualization and personalization of the user experience will determine winners and losers.
- The rapid diffusion of Flash and HTML 5 on handsets could negate much of the need for mediacos to use open platforms/app stores in mature markets.
- In the business sector we see SMEs and Manage Mobility as key battlegrounds. We see growth in hosted services for SMEs (e.g. Unified Communications infrastructure-one phone mobile and fixed, one voicemail etc. Personal v corporate liable devices (iPhone v BlackBerry) becomes a major issue.
- In the Emerging Markets area we see consolidation & 3G expansion in urban areas as key battlegrounds. With improved financing prospects, there will be significant consolidation among regional operators and rationalization of holdings.