Mobility Phones - Mobile Phones

In the wake of personal navigation devices’ success, cellular carriers have started to offer on-board and off-board navigation solutions, as well as a range of LBS (Location Based Services) such as friend finder and local search on GPS handsets. Community and social-networking-related functionality, such as the sharing of POIs (Points of Interest) and geo-tagged pictures, is also becoming popular and is expected to boost GPS-enabled handset uptake as carriers, handsets manufacturers, and service providers look to capitalize on the LBS trend.”While most CDMA handsets are already GPS-enabled and GPS is set to become a standard feature in GSM smartphones, GSM feature phones are next on the agenda to be equipped with GPS technology,” says ABI Research principal analyst Dominique Bonte. “GPS chipset vendors increasingly target handsets, looking for new markets and spurred on by the recent dramatic growth of personal navigation devices.”

However, as GPS begins to penetrate lower-end phones, the cost, power consumption, and footprint of GPS chipsets will have to be further reduced. This will be made possible by single chipset technology and the emergence in 2009 of combination chips integrating GPS, Bluetooth, and Wi-Fi all on one die. Major silicon vendors such as Broadcom, NXP, and Atheros are well positioned to develop such solutions following the acquisition of GPS chipset vendors Global Locate, GloNav, and u-Nav, respectively.

At the same time, the thorny issue of indoor GPS coverage has to be addressed, since handset-based LBS services are frequently used in challenging environments with reduced GPS signal strength. Network-assisted A-GPS and high-sensitivity GPS-receivers are becoming key requirements to reduce the time necessary to acquire fixes and to improve location accuracy.

ABI Research’s report, GPS-Enabled Mobile Devices, examines the market landscape and future potential for GPS-enabled mobile phones. It discusses critical business and marketing issues, as well as market opportunities and challenges for handset vendors, mobile operators, semiconductor vendors, and other industry players who address the GPS-enabled handset market.

This report forms part of two ABI Research Services: Mobile Devices and Location Aware Services, which include a variety of Research Reports, Research Briefs, Market Data, Online Databases, ABI Insights, and Analyst Inquiry Support.

While a large number of phones today still use browsers with very limited web browsing capabilities, many smartphones are incorporating browsers that support the latest capabilities such as AJAX and RSS, as well as websites optimized for viewing on a mobile device. ABI Research sees this segment of the mobile browser market accounting for the vast majority of growth over the next five years, as the open-Internet browser (OIB) segment for mobile grows from 76 million in 2007 to nearly 700 million browsers delivered in 2013.”The focus today for mobile browser developers is to take advantage of the latest web standards while also developing solutions tailored towards the unique experience of using a browser on a mobile phone,” says research director Michael Wolf. “The most recent commercial solutions from Opera, Openwave and ACCESS, as well as those using open source solutions such as Webkit, are targeted towards allowing consumers to access content on the web without limitations due to browser constraints.”

Still, it’s important to note that despite the best efforts of browser vendors and handset manufacturers, web usage on mobile devices has a significant distance to go in closing the gap with PC-based browsers. The absence of important plug-ins such as Flash on many handsets and the constraints of many phones compared to the PC mean that even OIB browser vendors such as Skyfire continue to see a need for server-assisted architectures for transcoding and web acceleration.

“There is a lot of development momentum for web content on mobile phones,” adds Wolf. “The move towards web-based applications means browser and web services engines will become increasingly important for mobile, whether these are in a commercial browser implementation or a customized widget. Ultimately, the long-term trend away from native applications to web-based applications means browser and web services engines will be increasingly important components in the mobile environment.”

Verizon Wireless and AT&T were the major winners across the board, together accounting for more than 80% of the auction’s $19.1 billion in bids. Verizon won seven of the 12 Regional Economic Area Groups (REAGs) in block C which provides nationwide coverage in the continental United States and Hawaii, and which also carries an “open network” requirement for the license holder. According to ABI Research senior analyst Nadine Manjaro, “These licenses will enable Verizon to extend coverage into rural areas and potentially pose a significant threat to rural operators. In addition, since Verizon has announced plans to deploy LTE, it is highly likely that LTE will be deployed in this frequency band.”"It’s no surprise that Google didn’t win,” Manjaro continues. “Google just went in to get the networks opened up. They did achieve their goal of requiring that the networks be open to whatever devices they intend to bring to market, without incurring major costs. The rules of the C block requires the spectrum to be open to any device and any application.”

EchoStar, which won a nearly nationwide footprint in the E Block, could be the new mobile broadband operator which the FCC hoped the 700 MHz auction would produce. EchoStar could potentially deploy mobile WiMAX services similar to those of Sprint and Clearwire, realizing its longtime strategic goal of adding broadband data services to its video offering. A major hindrance, however, says Manjaro, is that EchoStar only has six MHz of spectrum in each market compared to Sprint’s approximate 90 MHz in each market.

There is one other fly in the ointment: the failure of the D Block emergency services part of the spectrum to attract the required minimum bid. While some have suggested that Sprint might spin off the Nextel iDEN network to form the basis of a new nationwide public safety network, Manjaro disagrees: “Sprint is committed to iDEN, and has announced plans to grow it to 36 million customers. After this major disappointment for the FCC it’s back to the drawing board for them, and I think they will re-run the D Block auction with new requirements - probably lowering the reserve price.”

“The results of this auction will mean changes for existing operators,” Manjaro continues. “With flat rate pricing, all operators are now commoditizing the bandwidth. They will have to get creative in developing new services to increase revenue. Some are already starting down that path, with Verizon creating its A-IMS (Advances to IP Multimedia Subsystem) platform and kicking off its Open Development initiative, which allows third-party developers to build new applications and services for the network. That means consumers will win through flat-rate pricing and the ability to buy any device and use it on any network. That’s what the FCC wanted, and to me, it looks like a win-win situation, except for the rural operators mentioned above.”

The market for smartphones will grow from around 10% of the total handset market in 2007 to 31% of the market in 2013. A new study from ABI Research projects this meteoric growth to be a product of a number of complex factors including carriers’ drives to grow data revenues from advanced services and the general trend to pushing “smart” operating systems down into middle tier devices.ABI Research vice president Stuart Carlaw comments, “Smart operating systems are continually being optimized to run on processors with lower performance. There is a strategic move to support smart OSes in single chip midrange devices in order to unlock more data revenues.” Carlaw adds that, “The market is currently dominated by Nokia (52%) and Symbian (65%). However, the coalescence of the framework wars in the Linux environment and the growing stature of Windows Mobile will enable new competitors to put pressure on this established axis.”

The report finds that the iPhone effect is truly filtering through the handset market as other OEMs strive to remain competitive. Features that look set to proliferate and become central to enhancing user interface experiences include touchscreens, touchpads, and accelerometers facilitating tilt and shock sensing, as well as haptics providing tactile feedback.

Nokia has been ranked at the top of the latest Vendor Matrix released by ABI Research.Research in Motion (RIM) and Samsung claimed the second and third spots in the company’s most recent evaluation of worldwide smartphone vendors.

Vice president and research director Stuart Carlaw comments, “Nokia’s commitment to driving smart OS into a wider range of devices, and the success of its N series devices, especially the N95, gives it a huge market presence. Looking to the future, this segment will become increasingly crowded as Linux-based new entrants try to erode Nokia’s position.”

The Vendor Matrix is an analytical tool developed by ABI Research to provide a clear understanding of vendors’ positions in specific markets.

Vendors are assessed by ABI Research on the important parameters of “innovation” and “implementation” across several criteria unique to each vendor matrix, such as customer wins, contract awards, global reach, market share, patents, R&D spending, time to market, and first movers, among others.

For this particular matrix, under “innovation,” ABI Research examined user interface customization, handset differentiation, patent portfolio, battery life, handset size, support for third party application developers, the presence of a common and concise API, and operating system source code licenses.

Under “implementation,” ABI Research scrutinized the following criteria: smartphone shipments, brand equity, the number of smartphone models in the range, choice of OS, the company’s first-to-market status, its smartphone market share, its smartphone average selling prices (ASP), its distribution network, operator relationships, manufacturing facilities, ODM partnerships, overall handset ASP, and overall handset market share.

The total number of 4G subscribers worldwide, including both LTE and WiMAX, is expected to exceed 90 million in 2013, but a number of milestones must be passed en route, according to a new forecast from ABI Research. At the end of 4Q 2007, says the firm, there were nearly 3.4 billion mobile subscribers worldwide, with 2.7 billion on GSM/EDGE/GPRS networks.Worldwide WCDMA subscriber numbers hit 180 million in 4Q 2007. ABI Research expects migration to HSPA+ to begin in early 2010, and migration to LTE will commence by the middle of the same year. Vice president Asia-Pacific Jake Saunders comments, “We forecast the total number of WCDMA subscribers (including HSPA) to approach 720 million in 2013.”

Research analyst Hwai Lin Khor adds, “Some operators may not be ready to move on to LTE, as the peak data rates of 100 Mbps downlink and 50 Mbps uplink are achievable only with a 20 MHz spectrum band. That is a luxury that most operators may not have, and many may be content with the capabilities of HSPA+ or settle for suboptimal LTE data rates with whatever they have at the time.”

“While the long-term roadmap for CDMA2000, especially in relation to UMB, looks more uncertain, CDMA operators are taking advantage of current upgrade possibilities,” notes Saunders. Many have upgraded portions of their networks to EV-DO Rev A during 2007 while new CDMA entrants start with Rev A. ABI Research expects the total number of CDMA2000 subscribers (including 1x and various versions of EV-DO) to approach 800 million by the end of 2013.

Sales of mobile phone accessories are expected to generate over $40 billion in revenue in 2008. Handset vendors and mobile operators know that to increase sales of their feature-rich handsets, they also need to provide accessories that will allow users to fully enjoy and benefit from the applications and features supported by the handsets. This means providing accessories such as headsets, memory cards, and data connection kits, in addition to chargers and batteries.”Current market trends including the growing adoption of smartphones in the prosumer and consumer segments, as well as the increasing popularity of iPhone-like feature-rich devices with touchscreens are contributing to the growing demand for mobile phone accessories,” says ABI Research industry analyst Shailendra Pandey. “Further, more people buying expensive smartphones and feature-rich devices mean greater demand for accessories that protect handsets, and also for accessories that enable the use of different features and applications on the handsets.”

The growing popularity of mobile phones with large screens and touchscreens is resulting in strong sales of accessory products that offer handset protection, such as carry cases, covers, screen protectors, and scratch removers. Audio-video playback capabilities in handsets are resulting in growing demand for earphones and headsets, as well as memory cards to enable storage of music, videos and images. Also, the need for connecting the mobile phone to the PC/laptop for transferring multimedia and data files means a greater need for accessory products such as data connection kits and USB chargers.

ABI Research expects the market for mobile phone accessories to grow steadily in the next five years, generating over $80 billion in revenue in 2012. The firm’s recent study “Mobile Phone Accessories” examines the market landscape and future potential for mobile phone accessory products. It discusses the various types of mobile phone accessories, their features and pricing, key suppliers, market outlook, and vendor market share analysis for key accessories, as well as in-depth analysis for both in-box and aftermarket mobile phone accessories.

This study forms part of two ABI Research services, Mobile Devices and Short-Range Wireless which include a variety of Research Reports, Research Briefs, Market Data, Online Databases, ABI Insights, and analyst inquiry support.

NEC Corporation today announced that NEC Europe, a subsidiary of NEC Corporation, is working with mobile operator Telefonica O2 Europe to deliver the UK’s first live femtocell trial.O2 has begun an initial period of live testing in February. If successful, the trial will be rolled out in greater numbers across the UK in the summer, with the view to a commercial launch by early 2009. NEC is providing O2 with its Femtocell Solution, which includes 3G Femtocell Access Point for direct subscriber use, Femtocell Gateway and Access Point Management and Provisioning System.

The demand for 3G mobile voice and data services is accelerating and up to 70-80% of these services are used indoors, but there remain issues with 3G radio penetrating buildings. Femtocell provides a cost-effective alternative to the macro network to improve the 3G coverage and capacity indoors. A Femtocell is a 3G access point which has been developed as a consumer device for use in buildings. Femtocells provides a low-cost dedicated 3G coverage and capacity indoor, enabling a user with an existing mobile phone to access high quality voice and high-speed data services thus enabling a true ubiquitous high speed mobile broadband experience. The European femtocell market will represent the largest global market, with 16.6 million units per annum in 2012 out of a total shipment volume of 36 million units and a market valuation of US$4.2billion, according to ABI Research.

Richard Hanscott, VP Network Solutions Division, NEC Europe, commented: “This trial marks a watershed in the industry, as the benefits of femtocell technology for both operators and subscribers will be tested and proven for everyone to see. O2 is taking a leading approach to trial this solution which will help meet subscriber demands, and will reap the benefits when the service is launched commercially. NEC is leading the development of the femtocell market, demonstrated by the fact that we currently have several further trials underway globally. NEC is also heavily involved in the femtocell standardisation activities and is board member of the Femto Forum which sets the agenda for femtocell deployment worldwide.”

Shipments of recycled handsets (old handsets recycled for reuse) are expected to exceed 100 million units in 2012, according to a recent study from ABI Research. Shorter handset replacement periods, growing demand for low-cost handsets in emerging markets, regulatory requirements, and growing consumer awareness are key factors driving the market for recycled handsets.ABI Research industry analyst Shailendra Pandey says, “Mobile phone recycling companies such as ReCellular, Fonebak, and Eazyfone are witnessing good market growth, but increasing consumer awareness and retrieving used handsets at affordable prices are still key challenges. Also, the ASP of used handsets falls rapidly, so these handsets need to be handled at the lowest possible cost to ensure decent margins on their resale.”

Handset vendors including Nokia, Motorola, Sony Ericsson, Samsung, and LG are concentrating more on designing and manufacturing mobile phones to ensure that they are easily recyclable and contain a minimum of hazardous elements. This is being complimented by the efforts of mobile operators, retailers, recycling companies, charities and various take-back schemes, resulting in more users starting to return their old, no longer used handsets for recycling.

ABI Research expects the market for recycled handsets to grow steadily in the next five years, generating over $3 billion in revenue in 2012. Having these handsets in their portfolios can help mobile operators and MVNOs in optimizing customer profitability by better management of subscriber acquisition costs. They can use recycled handsets to address low ARPU subscribers and use new expensive handsets to target the high ARPU customers.

ABI Research’s recent study “Handset Recycling and Refurbishment” focuses on the growing market for recycled and refurbished handsets and the associated opportunities and challenges for handset vendors, mobile operators, recycling companies and retailers. It discusses the high level business and marketing issues, and critical considerations for addressing this market. It also provides detailed shipments and revenue forecasts for recycled and refurbished handsets as well as ethical disposal of handsets from 2005 to 2012.

Recently, Motorola took a stake in UIQ, a user interface solution for mobile devices pre-integrated with the Symbian mobile operating system. Symbian has long been considered a company dominated by the agenda of Nokia; and Motorola’s apparent “buy in” to the ecosystem looks to be (at face value) a knee-jerk reaction to its current poor performance. But ABI Research asks: Why would Motorola entertain strengthening the competitive position of its biggest competitor, Nokia?Research director Stuart Carlaw answers, “Motorola could be characterized as a blue-sky thinker, which is good with respect to long-term planning, but falls short on the here-and-now trends. Conversely, Motorola may look to release compelling multimedia phones to the market quickly, in order to combat softness in this segment of its portfolio.”

“It is prudent for them to keep all OS options open with support for Linux, Microsoft, and Symbian, as these are the triumvirate of technologies that will shape the future mobile software market. It is interesting to see some tiering of the OS in Motorola’s platform strategy, with Linux becoming the mid-tier choice whilst Symbian and Microsoft temporarily occupy high-end devices.”

ABI Research found that Symbian looks set to enjoy a solid market share of 70% or more of the smartphone OS market for the next few years. “However,” adds Carlaw, “Linux is forecast to encroach upon its position in the latter periods, with Microsoft occupying a solid third position. How interesting it would be if Motorola placed UIQ on top of a Linux OS.”

As recently as 2001, some mobile communications experts were saying that mobile television might be a reality within 20 years, but would probably arrive much later because the technical problems were so difficult. Yet only half a dozen years later, according to a new study from ABI Research, successful mobile video technologies are largely in place. As questions about business models, distribution, and content are resolved, the mobile TV industry will take off in earnest.ABI Research director Michael Wolf says, “Just a year ago, there was a lot of discussion in the industry about whether unicast or broadcast distribution models would prevail, and it seemed possible that unicasting would soon disappear. The new research suggests that while the major top-ranked channels will follow a broadcast model, unicasting is here to stay as a conduit for the ‘long tail’ of other content that consumers will desire.”

Unicasting also has the advantage of an unequalled intimacy between service providers, advertisers, and their “captive” audiences.

It is a time of experimentation. Most of the formats and distribution models under consideration have both pros and cons, and the effort is to find the right mix for each type of content and each target audience. Pricing is a good example. There are at least half a dozen proposed models for pricing access to mobile video content, reflecting the medium’s origin in the collision between the entertainment and wireless communications industries. Some will find the “sweet spot” that will attract and hold consumers; others will not.

Even recent assumptions about consumers’ likely viewing preferences are under challenge, in light of the medium’s improving quality. “Last year,” notes Wolf, “everybody was saying ‘We’re only going to have 2-minute, bite-sized morsels and mobisodes.’ Yet our latest research shows that people are actually watching mobile TV in their bedrooms, for 40 minutes at a time. So many content providers are now thinking about hour-long episodes of prime-time shows.”

More than 100 million handsets with touch screens will be shipped in 2008, according to a new study from ABI Research. Increasing numbers of handsets with touch screens have started to appear in the market, including the Apple iPhone, the LG Prada, the HTC Touch, and the Ultra-Smart F700 from Samsung, as well as the P990, M600, and W950 handsets from Sony Ericsson. Touch screens and touch pads are gaining popularity and becoming more common on handsets, while helping to make the handsets more intuitive, pleasant, and efficient to use.According to ABI Research industry analyst Shailendra Pandey, “Handsets with intuitive user interfaces allow quick and easy access to various applications and services and can result in higher ARPUs for mobile operators by generating greater usage of their value-added services. Mobile operators are therefore keen to promote and market handsets with good UI on their networks.” In the past, many smartphones and high-end handsets with a good number of attractive features have been commercial failures, simply because their user interfaces have been too complex and difficult for convenient use.

ABI Research expects that more than 500 million handsets shipped in 2012 will sport a touch-based user interface. “A good handset UI is important not just to meet and exceed users’ expectations,” notes Pandey, “but also to support fast and flexible design changes, operator customizations, and late software distribution, while maintaining low demands on the hardware.”

The firm’s new research brief, Mobile Phone User Interfaces (http://www.abiresearch.com/products/research_brief/Mobile_Devices_ Market_Update/112) analyzes the current market trends in handset UI design and examines the companies that are licensing advanced UI engines for handsets. It also discusses in detail the growing movement to develop touch-based UIs in handsets, and the position of handset manufacturers in the mobile operating system market. Further, based on current market developments, the report forecasts the likely features and benefits of handset UIs in the future.

A whole new class of “always-on” Internet-connected products, collectively termed “Ultra-Mobile Devices” (UMDs), will become popular over the next five years, according to a new report from ABI Research. By appealing to a wide range of buyers they will reach shipments of nearly 95 million units by 2012, and should prove extremely profitable for their makers.”Mobile Internet Devices and UMPCs” is the first study covering both types of devices. It categorizes in unprecedented detail the buyers who will be adopting them, and what applications they will be running.

“UMDs are a very exciting, potentially very lucrative area,” says ABI Research vice president Stan Schatt. “What makes this market so intriguing is that products will assume so many different forms. That product differentiation will be an integral part of the ultra mobile device marketing plan.”

UMDs are of two types, Ultra Mobile PCs (UMPCs), which run Windows and business applications and are aimed at business users, and Mobile Internet Devices (MIDs), which target consumers and are more likely to run a Linux operating system. The latter, with their lower prices and wider appeal, will make up by far the majority of the devices shipped. Apple’s iPhone and Nokia’s N800 may be seen as precursors of the MID. Both UMPCs and MIDs will feature multiple wireless connectivity technologies — Wi-Fi, WiMAX, and cellular — to maintain “any time, anywhere” Internet connectivity.

This diversity is also reflected in the range of applications that will be offered: Web browsing, music, navigation, voice, and data communications including email and IM, photo/video, and vertical commercial applications will all be popular. Some new applications, such as medical monitoring, are now in development as well.

The research identified several user-types who will find varying combinations of these applications appealing. These include “Frugal Generalists”, “Lifestyle Boomers”, “Soccer Moms”, “Gen Y Social Networkers”, and “Multimedia Enthusiasts.”

The ultra mobile device ecosystem will ultimately contain hundreds of vendors — chipmakers, display and device manufacturers, application developers and service providers — and the new report offers strategic recommendations for all of them.

The Linux community is assaulting the mobile phone environment with a two-pronged attack that focuses on commercial operating system solutions and real-time operating system (RTOS) replacement. In a new study, ABI Research forecasts that by 2012, more than 127 million devices will be enabled with a commercial Linux OS, up from 8.1 million in 2007. Additionally, device shipments that incorporate Linux as an RTOS replacement are set to grow to more than 76 million units in 2012, up from nearly zero in 2007.”Linux in the cellular phone is not a question of ‘if’, but ‘when’,” says research director Stuart Carlaw.The new report, “Mobile Linux: Bringing License-Free Operating Systems to Smartphones and Mid-Tier Devices,” found that the most fundamental issue that has plagued the growth of commercial Linux in this space - vertical and horizontal market fragmentation - has shown signs of being alleviated, both by growing collaboration between industry initiatives, and by the introduction of complete solutions such as the Trolltech-led GreenSuite, and ALP from ACCESS.

On the other side of the coin, issues with latency have prevented Linux being considered as a viable RTOS replacement in single-processor devices. But Carlaw points out that “Innovative solutions such as PREEMPT_RT, the VirtualLogix virtual operating environment, and the use of RTOS executives over Linux kernels, look set to deal with latency issues. However, the industry still needs to understand the total cost of ownership for Linux solutions, and it must create a common set of APIs to enable economies of scale for third-party developers.”

The new report, “Mobile Linux”, shows that the industry as a whole is rallying behind the Linux offering, but indicates that significant barriers still exist and must be addressed before Linux emerges as a true market power. This study explores these barriers, gives a frank SWOT analysis of the mobile Linux offering, and provides forecasts for Linux uptake in mobile devices for commercial OS implementations and RTOS replacement.

 Long Term Evolution (LTE) of 3G technologies is about to benefit from Rel-8 of the 3GPP standard, planned for the third quarter of 2007. This will be the trigger for development of components and systems to provide 100 Mbps download speeds to mobile devices. According to a new study from ABI Research, network operators will invest a total of almost $18 billion in LTE capital infrastructure over the period to 2014. This will yield a significant payoff, both in reduction of operating expenses and in the creation of new revenue from IP-based services.”LTE faces competition from other broadband wireless technologies and it will need to demonstrate clear technical and economic advantages to convince network operators,” says ABI Research analyst Ian Cox. “WiMAX has a two-year lead over LTE but suffers from not being backwards-compatible with current 3G technologies. LTE will not only be backwards-compatible with UMTS but is likely to be used to upgrade CDMA networks as well. But the industry is also working on HSPA+, which could offer the same performance in a 5MHz bandwidth. Without additional spectrum, operators face a difficult choice.”

Cox further comments that, “The industry is also making progress in avoiding intellectual property rights issues in the new standard. Next Generation Mobile Networks (NGMN) has been set up by leading operators to ensure a level playing field.”

For users, says Cox, LTE will enable broadband services, including VoIP, to be offered over SIP-enabled networks. Each service will be IP-based, offering high data rates and low latency, with online gaming becoming a reality along with mobile network data speeds comparable to those of fixed networks.

For vendors, LTE will allow development of a new market to replace declining 3G revenues. For operators, an all-IP network with simpler, flat architecture will reduce operating costs and boost revenues.