Informa mobile predicts mobile slowdown

Report sees slower shipments on horizon for mobile makers

Mobile handset shipments are likely to slow from 2007 onwards as markets such as Europe become saturated, according to analyst firm Informa, and sales will become dependant on replacement of old models.

While handset makers have seen double-digit growth in annual sales over the last few years, this is expected to slow from about 15.7 percent this year to 3 percent by 2011, Informa predicts in its Future Mobile Handsets report.

In developed markets such as Europe, device functionality will become crucial as handset makers struggle to maintain sales. Most phones already support multimedia messaging, with gaming and video downloads now driving consumer purchases. In future, music and mobile TV will be seen as essential features, according to Informa.

“Whilst the technology has improved significantly to handle many of these added features, future mobile handsets will need to incorporate more powerful processors, greater memory components, enhanced displays and increased battery longevity to cope effectively," said Dave McQueen, principal analyst at Informa.

While business customers will not see gaming and video as desirable features, they may benefit from handsets with more powerful processors and the better battery technology needed to support these functions.

Informa said it also expects more consolidation among handset vendors in future. Greater competition and a shorter life cycle for handset models may force vendors and operators to change their business model or get out of the market, with some vendors likely to be acquired by market leaders such as Nokia or Motorola.