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Impact of the Economic Downturn on Mobility
Posted: 24-Feb-2009 [Source: IDC]

[IDC believes the mobile industry is likely to fare the current global economic downturn better than many other industries.]

Framingham, MA -- The mobile sector has emerged as the dominant driver of the global telecommunications industry. The US$700 billion mobile industry now serves almost half of the world's population with 3.6 billion subscriptions at the end of 2008. Looking beyond the tremendous growth in revenue and subscriptions, the mobile industry is a diverse one, indeed a tale of two worlds – the developed and emerging markets. It is also an industry that is roiled by social and technological transformation, as well as the fickle but equally important dictates of fashion and consumer preferences.

IDC believes the mobile industry is likely to fare the current global economic downturn better than many other industries. For sure, in 2009, the industry is likely to see softening of sales in many of its constituent segments, from network infrastructure to mobile devices and from chipsets to software. Some other industry segments, like mobile devices, applications, and services, are likely to only grow over time – taking the current economic downturn in their stride.

"Different industry segment are likely to enjoy different growth trajectories, and some will enjoy it more than others," said Shiv Bakhshi Ph.D., director of Mobility Research. "So, for instance, some industry segments, like mobile infrastructure, are likely to settle to a new, marginally lower, baseline stride."

On a global level, IDC expects the number of mobile connections to continue growing at a substantial pace. From 3.32 billon at the end of 2008, we expect the number of mobile voice connections to reach 4.57 billion by the end of 2012, an average compound growth rate of 8.3% per year. The most prolific source of new mobile connections will be India, China, and the other large markets in which mobile penetration is currently below 50% of the population. However, the industry will be challenged by declining ARPU in all segments, and operators will have to rapidly implement new business models and revenue streams that leverage information services in the emerging markets, and multimedia applications in the developed countries.


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