WiFi Phone Sales Expected to Top $145 Billion in 2010

Sales of mobile phones, including smartphones, dropped 13% to $35.5 billion in the first quarter of 2007 following a seasonally strong pre-Christmas quarter in 4Q06, according to Infonetics Research in its latest “Mobile and WiFi Phones and Subscribers” report.

In the long term, mobile phone unit shipments are forecast to increase due to growth in developing countries, while revenue is forecast to decrease as the cost of basic units sold in developing markets continues to fall and competition in developed and saturated markets continues to increase, the report says.

“To date, smartphone purchasers have been largely business power- users, but the launch of Apple’s iPhone and Samsung’s BlackJack-media- playing smartphones that appeal to consumers-is giving the smartphone segment a boost, and could change the dynamics of the mobile phone market. Vendors will design more consumer-oriented smartphones, and cause fierce competition among incumbent players,” said Richard Webb, directing analyst for wireless at Infonetics Research.

Worldwide WiFi phone revenue, though up significantly in 2006, fell 8% to $5 billion in 1Q07, but is projected to post strong double-digit growth every year through 2010, when it will top $145 billion, as WiFi is incorporated into a growing range of mobile phones.

Enterprises are ramping up adoption of WiFi phones, driven by increased use of wireless LANs and IP PBX technology, while consumers are adopting WiFi phones because of their increasing adoption of broadband connections with wireless and VoIP-enabled CPE. At the same time, operators are launching dual-mode FMC services, which will also drive adoption of WiFi phones.

Other WiFi phone highlights from the report:

– Dual-mode WiFi/cellular phone sales are forecast to grow at a compound annual growth rate of 31% from 2006 to 2010, driven by healthy adoption in enterprise and consumer markets

– Seamless handover FMC phones are expected to represent 35% of the dual-mode WiFi/cellular phone market by 2010, vs. 3% in 2006

– Nokia leads in dual-mode WiFi/cellular phone revenue in 2006, ahead of Sony Ericsson and Motorola

– SpectraLink (Polycom) leads in single-mode WiFi phone revenue market share, significantly ahead of Linksys and Cisco

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