Revenue growth from mobile phone sales will not exceed 2% CAGR in Western Europe, 1% in North America, and less than 0.5% in Japan between 2010 and 2013, according to a new report by Informa Telecoms & Media.
In these regions, the smartphone market will represent the major growth area. Revenues from this type of phone will represent more than 55% of total handset market value in North America, Western Europe, and Japan. However, this growth will only help offset the sharp decline of non-smartphone market value.
Handset market volume sales in these regions are reaching saturation, leading to increasing competition between handset OEMs. The price war will only intensify at a time when new entrants such as Apple and Google are increasing their pressure on competitors to reduce their prices mainly for feature phones and smartphones.
"With the ongoing fall of feature phone and smartphone ASPs, several leading handset vendors are now looking for new ways of controlling handset manufacturing costs in order to maintain margins," said Malik Saadi, Principal Analyst at Informa Telecoms & Media and co-author of the report.
"With this in mind, vendors have already shifted the majority of production plants into low labour cost regions such as China, Taiwan, India, Vietnam and Eastern Europe and now they have to play the only remaining card - lowering the bill they pay for chipsets and terminal software."
On a wider scale, global revenues from mobile phone sales are expected to grow at 6.8% CAGR between 2007 and 2013, and should exceed USD200 billion by the end of 2013, says Informa Telecoms & Media.
Emerging markets, including Brazil, Russia, India, and China (BRIC) and Africa, will make up the majority global handset market value, with 60% share in 2013. Growth disparities between developed and emerging markets will become apparent within the next five years, says the think-tank.