Mobile Handsets Generated $117 Billion in Revenue in 2005

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Worldwide, mobile wireless handsets generated over US$117 billion in revenue in 2005, says a report released by Telecom Trends International,. The report says the 2005 revenue represented an increase of 14.9% over the revenue generated in 2004, and is the highest revenue ever recorded in a single year.

Nokia, Motorola, and Samsung were the top three vendors both in terms of revenue and shipments, the report said. These three vendors increased their share of revenue to over 60% in 2005. Sony Ericsson was in fourth place in terms of revenue and LG was in fourth place in terms of shipments.

The research report predicted that mobile handset revenue will peak to US$129.9 billion in 2008, and will then begin to decline, reaching US$125 billion in 2012. It said 815.2 million handsets were shipped in 2005, but the shipments will more than double by 2012 to reach 1.7 billion handsets.

According to the report, replacements will constitute 67% of handsets shipped by 2012. Due to falling prices of devices, revenue growth will significantly be behind shipments growth during the forecast period, it said.

Mobile handsets are being differentiated both on the basis of their functionality and on the basis of their target user group, said Naqi Jaffery who is the president and chief analyst of Telecom Trends International. While voice continues to be the common dominator in mobile handsets, buying decisions are increasingly based on features and functions other than voice, Mr. Jaffery said.

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