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3G growth poses new challenges for mobile phone component manufacturers

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Mobile phone component manufacturers are currently facing challenges resulting from trends in the mobile market, namely the proliferation of services with third generation (3G) mobile communication technology, reveals the report «The Little Device That Could: A 5-Year Handset Component Forecast «from In-Stat. Users intend to purchase mobile phones on the market at reduced prices, with greater memory capacities and with fewer components, which forces these companies to rethink their business.

The development of 3G services has brought benefits to operators and has enabled users to offer a range of mobile phones diversified in format and size and with the maximum possible functionality.

According to the market research firm, the growth of subscribers to 3G networks obliges operators to be more creative in the search for profitability in the service, while pressing the offer of cheaper equipment. Although WCDMA mobile phones remain at high prices, users intend to buy mobile phones at costs equivalent to those of the GSM network, which reach 25 euros.

Another of the market requirements is related to the number of components that the equipment has. Intel and TI advocate the single-chip mobile phone and manufacturers of these devices are forced to reduce the number of components to provide more compact and cheaper terminals.

In-Stat also points to a trend towards increasing the memory of mobile phones, since operators concluded that users do not buy music and applications if they do not have spaces on their equipment. The market research company therefore advises manufacturers to invest in this area, by using larger capacity flash memories or by integrating external memory cards.

Remember that this week Samsung announced a new terminal, the SPH-V7900, which has a renewable 3GB memory card.

Related News:2005-08-01 – Emerging markets boost sales of mobile equipment in the second quarter

2005-03-14 – Smartphone and 3G terminals boost European mobile market in 2005