Deloitte report depicts tough time for telecom

The year 2009 is likely to be tougher than recent years for smart phones while the mobile industry should keep its faith. Mobile television and services, too, are likely to slow down or even be closed as major sporting events, which can be a catalyst for the adoption of new media formats, largely failed to launch mobile television.

According to the latest ‘telecommunications predictions’ report for 2009 by Deloitte, during 2008, smart phone sales increased by almost 35 per cent, while the market as a whole grew 10 per cent. But a continued economic downturn during 2009 may buffet the fortunes of smart phones. While sales growth for all mobile phones may decline to around 4 per cent, smart phone growth could fall by more than 15 per centage points, to under 20 per cent. Smart phones market share may increase by no more than 2 percentage points.

Mobile component manufacturers should look at ways of reducing their costs. It is likely that handset manufacturers will want to pass on some of the downware pricing pressure, the report pointed out.

Year 2009 is likely to see a new range of mobile phones, which are expected to overcome the convergence compromise. In the mobile market, the objective of convergence has not always been attained due to compromise on quality. For instance, the quality of photos taken on many camera phones has often been a far cry from that offered by dedicated devices. Mobile phone MP3 players have often suffered from compromised user interfaces and poor quality sound compared to their standalone peers. Demand for mobile phone converged with games-playing capability has remained niche. However, thanks to the new range of mobile phones due for launch, by the end of this year, sales of mobile camera phones during 2009 may exceed those of dedicated digital cameras, whil sales of music phones could be trebled.

Deloitte also predicted that continued economic striff in 2009 may accelerate the temporary demise, in some regions, of the mobile industry’s most talked about service this decade, mobile television. Lower liquidity and a focus on cash may make it unlikely that investments in broadcast systems, such as DVB-H and mobile television systems based on existing 3G infrastructure, would be approved.

Lower handset subsidies may mean fewer high-end phones capable of supporting mobile television coming into the marekt. Lower media sector revenues suggest a greater reluctance from the creative sector to experiment with new media formats. Depressed consumer confidence is likely to make consumers less likely to spend money on add-ons to their mobile subscriptions.