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Operators and handset manufacturers need to adapt to the consequences of a smartphone world

June 20, 2014  | Subscribers Only

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The smartphone has transformed the entire telecoms industry. Since the introduction of the iPhone in 2007, keyboards have almost completely disappeared from mobile phones, ushering in a new age of similarly looking hardware. With many brands finding it hard to differentiate coupled with the collapse of Nokia, a new wave of local brands have emerged that threaten to alter the dynamics of the global handset market. IHS examines this trend and whether or not this is a permanent change.

The smartphone revolutions also brought over-the-top (OTT) apps that replace services provided by operators and are freely available. Operators are now relying more and more on undifferentiated data services for their revenue. In this report, IHS show how 4G is not a silver bullet that will solve operator revenue declines, and what business models should instead be adopted to address this issue.

Highlights:

  • Apple has gone from zero shipments in 2006 to being the second largest smartphone vendor globally and is set to become the second largest overall handset vendor by 2015.
  • Nokia lost top spot in the handset market to Samsung in early 2012; a position it had held since 1998. Once the market leader, Nokia could only claim 3% of the smartphone market in 2013.
  • At the start of 2009 the top five manufacturers accounted for just over 75% of the entire handset. At the start of 2014, the top five ranked manufacturers represented under 60% of the market.
  • When the iPhone was introduced in 2007, voice and SMS represented 93.2% of all operator revenue in Europe. By 2013, that number has fallen to just over 70%.
  • Since both operators launched 4G services in December 2010, Verizon has seen its ARPU increase by 7.7% whereas NTT DoCoMo’s ARPU declined 15.8%.

In this report: 

  • The changing structure of the handset market
  • How a lack of differentiation in smartphones is affecting product strategy
  • Why the changes in the handset market likely to be permanent
  • What is causing pressure on operator mobile revenue
  • How operators can grow mobile data revenues
  • Why 4G is not the answer on its own

List of tables and charts:

  • Smartphone penetration of all handsets
  • Handset market share: Q1 2009 vs. Q4 2013
  • A selection of local smartphone manufacturers
  • Number of handsets released per brand
  • Western Europe mobile service revenue
  • Examples of different mobile data business models
  • Verizon Wireless 4G uptake and ARPU trend
  • NTT DoCoMo 4G uptake and ARPU trend

Number of pages: 8

Number of charts and tables: 8

Geography
China
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