Broadband Devices Driving Mobile Market Gains - InformationWeek

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7/12/2010
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Broadband Devices Driving Mobile Market Gains

North American market has achieved saturation with an 88.3% penetration rate, says Frost & Sullivan.

With more than 300 million mobile connections and an 88.3% mobile communications penetration rate in North America last year, the market is now officially saturated, according to research firm Frost & Sullivan.

The explosion of broadband-capable personal and productivity devices was cited as the prime reason for the recent surge in adoption of mobile data services, allowing mobile operators to continue generating high mobile data revenue, reported Frost & Sullivan's 2010 North American Consumer Mobile Communications Outlook.

Another factor cited for the growth is the increasing use of messaging services, which are used by consumers for communication, entertainment, information, and commerce, the report said. "Besides voice, text-messaging has evolved as an important medium for communication," the report said, "primarily because it can be used in a wide range of scenarios, is ubiquitous, and extremely cost-effective especially when used as part of a data plan."

Mobile Internet and premium mobile content are among the other significant and popular data services, the Frost & Sullivan report said, and smartphones are one of the biggest factors driving data usage on the mobile networks. Text messaging is regularly being used by over 60% of North American mobile subscribers, generally through a dedicated or a bundled data plan.

Due to the highly competitive mobile operator market, carriers are offering innovative premium data services that run over next-generation wireless networks and devices in order to maximize revenue from existing subscribers, the report said. Wireless broadband and other connected services will also be offered as a way to augment revenue. Such additional services will propel the penetration rates to exceed 100% by 2013 -- taking into account all possible connections, said Vikrant Gandhi, senior analyst.

Tablets will become a big segment, as well as e-readers and machine-to-machine connections, Gandhi said. "We think the compounded annual growth rate of the connected devices could be as high as the 22-to-25 person range by 2015," he said.

One of the surprising findings was that the smartphone adoption rate -- which Frost & Sullivan is projecting to be more than 117 million by 2015, compared to 95 million for feature phones -- is higher than previously thought, Gandhi said. "This is due to so many cool phones coming out like the iPhone, which is in league of its own for now. I say that because we do expect Android... by 2012 year end, could have more users than the iPhone in North America."

By 2015, both Android and Blackberry devices could be the main installed bases for smartphones, he said, given that the latter is pushing more into the consumer segment, where it has not historically been.

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