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Summary:

With nearly 61% market penetration, it is only a matter of time before the hyper-growth in the US wireless market will start to trend towards tepid. I had pointed this out earlier in the week, speculating that now the carriers will cut back on discount plans […]

With nearly 61% market penetration, it is only a matter of time before the hyper-growth in the US wireless market will start to trend towards tepid. I had pointed this out earlier in the week, speculating that now the carriers will cut back on discount plans and focus more on becoming profitable. New data released by Jupiter Research, confirms my theory to some extent. The new report says that the total US mobile subscribers will steadily increase from 172 million in 2004 to 212 million in 2009, representing 69 percent of the US population, up from 59 percent in 2004. I think it is time to stop thinking of US as a wireless backwater. 69% of total US population is on an even footing with Europe, at the very least.

Instead the focus will be on selling these consumers more value added services and content. For instance, the music/voice ring tones will drive the majority of near-term growth. The sales are expected to increase from mere 6.1 million downloads in 2004 to 268.3 million — or 82 percent of the total market – in 2009. Total revenue in this market will reach $724 million in 2009. Mobile games are one of the fastest growing data categories for carriers. Mobile games will contribute $430 million in revenue to carriers in 2009 — up from $72 million in 2004. Another notable factoid from this research: continued and growing popularity of SMS.

US wireless consumers sent 22.8 million( could it be billion?) SMS text messages in 2004, dwarfing MMS messaging. SMS will continue to outpace MMS messaging through 2009 due to limited consumer adoption, fewer messages sent overall, and lack of carrier interoperability, Jupiter says. By 2009, US mobile handset users will generate 49.8 billion SMS messages and 4.4 billion MMS messages, resulting in $5.3 billion in carrier revenue — by far their largest source of non-voice revenue. Sometimes, its the little things, the simple things. So carriers, while you are trying to put a noose around the phone, it might be time to learn from SMS. It worked because everyone can send these tiny text ditties to everyone. It worked because the standards were open. So if some of us want iTunes phones, let us buy one.

  1. Charlie Sierra Tuesday, March 15, 2005

    If MOT wants to really sell the iTunes phone, then let them startup an MVNO, like everybody else.

    As an MVNO, they can sell any damn phone they like (well almost!).

    Om, I hate to disagree with you, but on this issue of “balance-of-power” between carriers and name-brand mfg’s, I have to say its not as one sided as it seems. The mfgs reap big benefits from have the carrier act as their phone consumer, those being pricing(really subsidies) and inventory mgt. Granted these may be un-sexy topics, but they are quite important.

    If the FCC mandated that carriers can’t subsidize phones, and consumers could take their phones with them as they switch carriers, etc. that would have a very negative impact on the name-brand mfgs.

    Raising a little PR stink about the iTunes phones is just part of the game.

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  2. good points you raise charlie. guess i just want an itunes phone bad enoug that all good business sense has left my brain right now. lusting for anything, including an iPhone is a bad idea

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  3. 2004
    —–
    22.8 million SMS text msgs
    .8 million MMS text msgs (guess)

    2009
    —–
    49,800 million SMS text msgs (proj)
    4,400 million MMS text msgs (proj)

    49800/22.8*100 = 218421% growth in 5 years?

    If I am thinking clearly here doesnt this imply something like 193% growth annualy for 5 years?

    Let’s go onto Jupiters MMS numbers now:

    4400/.8*100 = 550000% growth in 5 years?

    Okay perhaps my assumption of .8 million MMS in 2004 is off, lets take the 5 year growth projected for SMS and use that to work backwards from projected MMS to what is currently the MMS market in Amercia (according to Jupiter).

    218421/100 = 2184.21

    4400/x = 2184.21

    x = .496

    So Jupiter is saying MMS market right now in 2004 is less then half a million MMS messages?

    What are these jokers at Jupiter smoking, because its got to be some good stuff to think these are plausible growth numbers for the american SMS/MMS market!

    Anyone who pays money for “market analysis” like this has just wasted their money in my eyes.

    But hey, I could be smoking crack here guys.

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  4. Oh and to touch on Charlie’s comment. His opinion summed up here is basically:

    “Balkanize the carrier space in the name of customer choice”

    I forgot who said it (it might have been Om) but were people talking recently about how consolidation of the carrier space was going to be a Good Thing(tm) for the customer? And now we are saying that the carriers have too much say and that the solution to carriers having too much say is to introduce more carriers into the market?

    I’m confused.

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  5. my guess is that it is a typo here. in the jupiter forecast. also it was not me who said that the consolidation was a good thing for the customer. i did say that now finally some semblence will return to the market which means new technologies might get deployed right in time. that seems to be playing out right according to plan. the ev-do roll out from verizon and sprint has started. cingular is slowly rolling out the 3g network. what it means for the end customer, who knows – at least for now

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  6. 50 Million Cingular Customers?

    According to a couple of news stories, Cingular has over 50 million subscribers. Talk about raising the bar. That’s one hell of a mobile-to-mobile calling family. Meanwhile, Om points out that, mobile phone growth will slow. When you have a…

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