Mobile communications: best way out of the crisis!

For the first time since 2009, an analyst firm estimates the handset market shrank last year: according to Gartner, global mobile phone sales to end users declined by 1.7% in 2012, to reach 1.75 billion units sold.

This shrink actually has many causes. Of course, the global crisis, and the income drop experienced by large parts of the world population plays a role. But, at the same time, one can see smartphones sales increased by 38.3% YoY when feature phones sales decreased 19.3% YoY, or, in other words, end-users are ready to spend more on their handsets to benefit from the latest advances of technology.

Leaders Samsung and Apple dominate the market with a combined share of 52% in Q4/2012, according to Gartner. Market dynamics globally are extremely dependent on the product announcements from these two leaders. Samsung has kept on a proposing new products, especially with the Galaxy SIII, and the Galaxy SIII Mini, both of them NFC-enabled, whereas Apple has still not integrated NFC in its latest’s iPhone 5, seen by many as just an incremental evolution of the iPhone 4.

Also Nokia and RIM were just recovering in 2012 after a couple years of disgrace, due to lack of innovation, mismanagement, etc. Both of them have new offers, heavy on innovation, with new operating systems, and NFC capabilities. As Samsung-Android and Apple-iOS hold strongly the first two places in terms of ecosystem, competition is now open between Windows Phone and BB10 for the third place.

But, let’s not forget that the GSMA has demonstrated that GDP growth is strongly fuelled by mobile communications penetration. GSMA, Deloitte and Cisco, in a recent study show that a 10% subsection from 2G to 3G penetration increases GDP per capita growth by 0.15 percentage points, a doubling of mobile data use leads to an increase in the GDP per capita growth rate of 0.5 percentage points, and a 10% increase in mobile penetration increases Total Factor Productivity in the long run by 4.2 percentage points.

As the Mobile World Congress is happening, the source for growth for our industry comes more from its ability to make consumers (and ourselves too) dream than from a simple rational economic approach.

Thierry Spanjaard

Chief Editor

Smart Insights