Smartphone Sales Revenues Forecast to Jump Nine-fold To $7.8 Billion by 2005, The Strategis Group Reports - Industry Trend or Event

Cambridge Telcom Report, April 24, 2000

Revenue from sales of so-called Smartphones -- mobile phones which can access the Internet -- are projected to grow more than ninefold by 2005 to $7.8 billion, The Strategis Group says in a new report. Smartphone sales this year are expected to be $867 million.

"Smartphone manufacturers tell us that beginning next year the majority of new handset models will be wireless application protocol-enabled," Cynthia Hswe, analyst with The Strategis Group, said. "This creates a unique supply- and-demand situation where new users will receive handsets with wireless data capabilities whether they plan to use them or not. We estimate annual Smartphone sales will reach 60.3 million units by 2005."

The Strategis Group is made up of communications industry analysts who publish in-depth industry research reports on the Internet, cable TV, satellite, telecom, broadband and wireless industries. The Strategis Group's market studies, valuations and strategic planning provide crucial information to U.S. and international communications industry leaders.

"The wireless device industry is undergoing a major transformation," Hswe said. "With the increasing convergence between voice and data services, questions remain about which devices will be conduits of these services, particularly in regards to the emerging wireless Internet.

"In response to the excitement surrounding the wireless Internet, Smartphone and Personal Digital Assistant (PDA) manufacturers have mobilized their operations to produce devices that will become the wireless Internet device."

The report estimates there will be more than 9.5 million 2.5/3G mobile high-speed data subscribers by 2005; 6.8 million of them business subscribers and 2.8 million of them residential subscribers.

In a survey of current wireless phone users, more than one-third said they would be interested in a wireless phone which can access the Internet. Even among non-users of wireless phones, The Strategis Group survey showed 20 percent would be interested in a wireless phone with the ability to access the Internet.

"We believe that wireless application protocol is an ideal interim solution for the wireless Internet," Hswe said. "On the demand side, WAP facilitates use of wireless Internet applications by bringing the best possible clarity to wireless devices. On the supply side, WAP solutions are low cost and will enable operators to use wireless data to increase subscriber minutes of use, reduce churn and attract new customers."

Hswe said that "Phone.com is currently the dominant microbrowser company, but as Microsoft, Oracle and other major players enter the marketplace, competition will be heating up in the battle for wireless Internet navigation software."

The Strategis Group, an edr (e data resources) company -- with offices in Washington, D.C., London and Singapore -- publishes in-depth industry research reports, provides customized consulting services and supplies continuous information solutions to the cable TV, satellite, Internet, competitive telephony, broadband and wireless communications industries. The Strategis Group's market studies, valuations, and strategic planning provide crucial information to communications industry leaders throughout the world. SmartPhones and Wireless PDAs is available on CD-ROM in PDF or HTML format or in print format.