Feb 6th, 2009 |
The cellphone industry has seen phenomenal growth over the years. There are over 6 billion people on Earth that own mobile phones for both personal and professional use. But at what point does this market’s growth taper off? Exponential growth year over year is not sustainable, and some of the recent earnings statements are highlighting the growth’s end is near.
Motorola recently announced their 4th quarter earnings and sales were $7.14 billion, down 26 percent from $9.65 billion in the fourth quarter of 2007. One could point the finger of blame at the economy, but perhaps a bigger issue is at hand: market saturation.
Smart phones enable a new way of communication beyond voice. The Web and SMS are now part of the cellular industry and remain an integral way to exchange data. New data applications will create new revenue streams for the industry, but the explosive growth we’ve seen the last 5 years is slowing down. Handset manufacturers can’t rely on consumers and enterprise users to continually upgrade to a more expensive model.
For more insight into this downturn, take a peek at this New York Times article.
While phone sales are heading down, there’s no question that the phones we’re buying are smarter, faster, cheaper which means the mobile phone can finally become a large-scale “platform”. With platform status I would argue that we’re just at the beginnings of what will become of the mobile industry. But much like the desktop computer market, I don’t think the action is going to be so much in hardware as it is in the apps and services that will be created.