Wow, that’s harsh. The last few years’ growth has been over 10%, mostly above 20%, per year.
But, we’ve known that it couldn’t last. I mean, in the next few years, anyone who wants a phone will have one. Then what?
I had a discussion with a friend of mine who is an investor. His analysts watch the ASP and number of devices sold as a gauge for the health of the industry. The problem is that looking at those number are enough if these companies were only in devices and that the device market still had more to go (like the PC market).
Alas, this is a market quite different from others. I remember seeing presentations back in 2002 about how the pone market would soon be like the watch market – saturated and stable.
But, at least for my company, we’ve been trying to go beyond the device. Indeed, the latest big upheaval was all about focusing on services.
So, my comment to my friend is that numbers of devices sold and ASP are not longer the main indicator for Nokia. As Nokia heads deeper into services (though along the way fusing services with mobiles), analysts need to look at other indicators, such as Web service competitors, mobile offering from other services, and even devices from services, to gauge the future of the company. My challenge to my friend (and part of the reason he initiated the discussion) was that his analysts need to get their heads out of device numbers, parameters, and specs and more into the internet-fueled services world.
Link: IDC: Single-digit handset market growth in ’08 | CNET News.com:
“Over the last three years, growth in the industry during the holiday quarter has fluctuated from 18.0 percent to 30.0 percent, and this past quarter we saw it drop to 11.6 percent,” IDS senior analyst Ryan Reith said in the statement.
“The expectation that the market would maintain the level of growth it saw over the last three years was unrealistic. We expect growth to be in the single digits throughout 2008, and most likely for years to follow.”
During 2007, 1.144 billion cell phones were sold worldwide, 12.4 percent more than a year earlier.
