News
Issue #2003 - 15 (May 2003)
(Updated May 8, 2003)

MARKET OUTLOOK & TRENDS

ARC Group Forecasts Worldwide Shipments of High-end Smartphones Will Reach 45 million by 2007

According to the latest report from ARC Group, high-end smartphones will grow from less than 1% of total mobile handsets shipped in 2002 to 5% in 2007.  ARC Group expects annual shipments of these devices to grow  from around 3.5m units in 2002 to 45m units by 2007. Nevertheless, during the next 5 years, the connected handheld market will remain a small segment of the total handsets market. 
Smartphones, which were initially designed primarily as mobile phones with data-communications functionality along with advanced computing capabilities, have the ability to handle and host a number
of applications letting them behave exactly like handheld computers. In 2002 high-end-smartphone shipments accounted for 0.3% of the total handset market and by 2007 this ratio is not expected to exceed 5%. But the value attributed to this market segment could be as high as 20% of the total handset market because high-end smartphones will offer extra features and functionality, and they will therefore 
remain more expensive than traditional handsets. Symbian is currently the most used OS for high-end smartphones, with an overwhelming 60% share in 2002.However, Symbian's worldwide share of this market is expected to decrease over the years, falling to around 39% by 2007. Palm OS currently holds
the second position in the market rankings with a share of 22%. 

However with the emergence of the Pocket PC smartphone-edition in 2002, Microsoft OSs are likely to gain momentum and mainly eat into Palm's share. The Palm OS market is expected to fall drastically
to just under 5.5% in 2007. Microsoft currently holds third position in this market, with a modest share of 6.6% in 2002. MS OSs are expected to rapidly catch up with Symbian by 2007 with a share of 40%. Nevertheless, such high market share growth will very much depend on the alliances that Microsoft is able to forge with operators and device manufacturers around the world. 

The author of ARC Group's Future Mobile Computing Report, Malik Saadi says: "Sales of these connected handheld devices remain low to date for many reasons, including their relatively high cost, which makes it difficult for operators and service providers to balance device subsidies against the potential for increased data revenue streams." Other factors include their comparatively large size and heavy weight in comparison with traditional handsets, and their very short battery life due to the substantial energy consumption of the CPUs, communication modules and high-resolution wide screens - all necessary features for dealing with bandwidth consuming data applications and services. In the short to medium term, connected handhelds and smartphone-handhelds will attract professionals, early adopters and a considerable number of technophiles who are ready to invest in the latest technology.

Source: The ARC Group in UK

MobileInfo Comments and Advisory: ARC Group is generally over-optimistic in its forecasts.  However, it might have learnt that simplistic statistical projections and massaging of survey results does not make a reliable forecast. Having cautioned the readers about that, we felt that going from 3.5 million to 45 million high-end smart phones is possible. A lot will depend on how well the devices are integrated for voice and popular data applications.

 Note: This news release may contain forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of Securities Exchange act of 1934 in USA. Similar provisions exist in other countries. There is no assurance that the stipulated plans of vendors will be implemented. MobileInfo does not warrant the authenticity of the information. Readers should take appropriate caution in developing plans utilizing these products, services and technology architectures.  All trademarks used in this summary are the property of their respective owners.