Publications
Partners
Network operators continue to be solid investments. The rapid growth we saw from companies such as MTN in the early days seemed too good to be true at the time. And while the initial explosion is well over, most major operators have managed to sustain impressive growth numbers right up until now. Then there’s the device market that seems to explode from one year to the next.
But where’s the ceiling? How big is this market and how big will it get? An interesting company to contrast that discussion against is Qualcomm. As the largest supplier of chips in the cellular industry, Qualcomm components of some sort can be found in just about any piece of cellular infrastructure or gadgetry. If the market was showing signs of slowing, Qualcomm would be one of the first bellwethers. And if you want to get a handle on growth prospects – well, that’s the question the company spends every day wrestling with.
I was invited to a teleconference with Qualcomm CEO Paul Jacobs in June as part of its relatively new strategy to step out from behind the scenes and make its brand better known. Jacobs is a mine of information about the cellular industry in general and spent much of the call outlining growth figures the company is recording and predicting.
By Qualcomm’s estimations, there are currently more than 1,3bn people globally making use of 3G connectivity. Jacobs says the company is predicting that number to grow by 1bn/year until 2015, at which time there will be more than 3bn 3G connections. A large number – but still well below what the addressable market worldwide will be by then.
That’s real people connecting to the Internet using mobile 3G. However, when you also factor in machine-to-machine connections, the numbers start to really look impressive. For example, infrastructure vendor Ericsson has famously predicted more than 50bn overall connections by 2020.
As the market opens up for mobile connectivity, device manufacturers are fighting for slices of the pie. Jacobs says more than 200 new smartphone models were launched last year and over 8bn mobile applications downloaded in the year. By 2013 he sees that number growing to more than 50bn as smartphones become more affordable and their market grows.
But there’s far more to it than smartphones. As Vestact’s Paul Theron has pointed out in the past, SIM cards are going everywhere. And whereas people had just smartphones before, now they’re carrying around tablets, reading devices and other gadgets with embedded connectivity. That’s why Vestact has been bullish about operators such as MTN in Africa, where it seems we have a long way to go before hitting a ceiling for cellular market growth.
Jacobs says non-handset – meaning not cellphones – mobile broadband device shipments will show growth from 25% to 40% between 2009 and 2014. And he’d know.
But the really impressive numbers are coming from the developing world – especially the BRIC countries. Jacobs says the growth in adoption of CDMA technologies alone is astounding; 233% in India, 309% in Russia, almost 400% in China and a whopping 438% in Brazil. Overall growth for developing markets is being pitched at 370% between 2010 and 2015.
There are also interesting side stories here in other industries, as people being connected benefit more than just operators and device manufacturers. For example, in services Jacobs says: “With wireless connections embedded, the phone is increasingly becoming a sensor and it’ll start telling you about the services that exist around you.”
This services explosion is another growth story, as location data is added to near-field communications and other recent advancements in mobile technology. Alas, we’d need more space to venture there…
But where’s the ceiling? How big is this market and how big will it get? An interesting company to contrast that discussion against is Qualcomm. As the largest supplier of chips in the cellular industry, Qualcomm components of some sort can be found in just about any piece of cellular infrastructure or gadgetry. If the market was showing signs of slowing, Qualcomm would be one of the first bellwethers. And if you want to get a handle on growth prospects – well, that’s the question the company spends every day wrestling with.
I was invited to a teleconference with Qualcomm CEO Paul Jacobs in June as part of its relatively new strategy to step out from behind the scenes and make its brand better known. Jacobs is a mine of information about the cellular industry in general and spent much of the call outlining growth figures the company is recording and predicting.
By Qualcomm’s estimations, there are currently more than 1,3bn people globally making use of 3G connectivity. Jacobs says the company is predicting that number to grow by 1bn/year until 2015, at which time there will be more than 3bn 3G connections. A large number – but still well below what the addressable market worldwide will be by then.
That’s real people connecting to the Internet using mobile 3G. However, when you also factor in machine-to-machine connections, the numbers start to really look impressive. For example, infrastructure vendor Ericsson has famously predicted more than 50bn overall connections by 2020.
As the market opens up for mobile connectivity, device manufacturers are fighting for slices of the pie. Jacobs says more than 200 new smartphone models were launched last year and over 8bn mobile applications downloaded in the year. By 2013 he sees that number growing to more than 50bn as smartphones become more affordable and their market grows.
But there’s far more to it than smartphones. As Vestact’s Paul Theron has pointed out in the past, SIM cards are going everywhere. And whereas people had just smartphones before, now they’re carrying around tablets, reading devices and other gadgets with embedded connectivity. That’s why Vestact has been bullish about operators such as MTN in Africa, where it seems we have a long way to go before hitting a ceiling for cellular market growth.
Jacobs says non-handset – meaning not cellphones – mobile broadband device shipments will show growth from 25% to 40% between 2009 and 2014. And he’d know.
But the really impressive numbers are coming from the developing world – especially the BRIC countries. Jacobs says the growth in adoption of CDMA technologies alone is astounding; 233% in India, 309% in Russia, almost 400% in China and a whopping 438% in Brazil. Overall growth for developing markets is being pitched at 370% between 2010 and 2015.
There are also interesting side stories here in other industries, as people being connected benefit more than just operators and device manufacturers. For example, in services Jacobs says: “With wireless connections embedded, the phone is increasingly becoming a sensor and it’ll start telling you about the services that exist around you.”
This services explosion is another growth story, as location data is added to near-field communications and other recent advancements in mobile technology. Alas, we’d need more space to venture there…
