Private Branded Handsets Will Generate Over $10 Billion

[Ironwalt]

Press Release Source: ABI Research


Private Branded Handsets Will Generate Over $10 Billion for Operators in 2007, According to ABI Research
Wednesday April 25, 9:51 am ET


LONDON--(BUSINESS WIRE)--Mobile operators will make approximately $10.7 billion worldwide through the sales of private branded handsets in 2007, almost 23% more than the $8.7 billion earned in 2006. A number of factors including handset delivery delays, greater customization needs, increasing demand for low cost handsets, and the growing importance of emerging markets are prompting operators to choose private branded handsets.

According to ABI Research industry analyst Shailendra Pandey, "In the past, private branded handsets have mostly been high-end feature phones and smartphones supplied to operators by the likes of HTC, Sharp, and Quanta. Now, however, the growing demand for low-cost and ultra-low-cost handsets means that operators also have opportunities to provide private branded handsets in this segment. They can partner with selected local manufacturers who will be able to address the low-cost market by avoiding import costs and benefiting from the skill sets and cheap labor of indigenous work forces."

Therefore, in addition to having handsets from leading vendors such as Nokia and Motorola in their portfolios, operators are looking for opportunities to forge partnerships with these local manufacturers, who are also more willing to accept operators' customization and branding needs. One example is Vodafone's well known agreement with Huawei to supply 3G handsets for its operations in 20 global markets, and the more recently announced partnership with ZTE for 2G handsets.

In the next five years, over 80% of new mobile phone subscribers will be from the emerging markets of Asia, Africa, and Latin America. Asia is now the most important region for demand, supply, and competition in the handset industry, and Asian suppliers have significant cost advantages over suppliers from other regions.

ABI Research expects the market for operator private branded handsets to grow to over 127 million handset shipments by 2011. The firm's recent study, "Operator-Branded Handsets" (http://www.abiresearch.com/products/...rator-Branded_ Handsets) examines the market landscape and future potential for operator branded handsets. It discusses the driving forces, the competitive business environment, and the handset vendors, original design manufacturers, mobile operators and MVNOs involved in this market.

This study forms part of two ABI Research services: Mobile Operators (http://www.abiresearch.com/products/...ators_Research _Service), and Mobile Devices (http://www.abiresearch.com/products/...ces_Research_S ervice), which include a variety of Research Reports, Research Briefs, Market Data, Online Databases, ABI Insights and analyst inquiry support.

(Due to their length, the preceding URLs may need to be copied/pasted into your Internet browser's address field. Remove the extra space if one exists.)

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in broadband and multimedia, RFID & contactless, M2M, wireless connectivity, mobile wireless, transportation, and emerging technologies. For information visit www.abiresearch.com, or call +1.516.624.2500.



Contact:
ABI Research
David Halperin, +44 20 7096 1594
pr@abiresearch.com

--------------------------------------------------------------------------------
Source: ABI Research

[Fire14]

I hate Carrier branded phones, and don't know if it's more of a principle issue or that I feel they probably restrict the software even more when it's carrier branded (I am guessing, since I never used one to confirm this).

[hf1khal]

and this article tells as to how hard it is for smaller carriers to get handsets:

Handset Hangups
By Monica Alleven
WirelessWeek - April 15, 2007
Smaller CDMA carriers’ efforts to get the latest handsets are working to some extent, but they still don’t get devices as fast as their larger competitors.

Those exclusive handset deals that Tier 1 U.S. operators get may be great for them, but handset makers aren’t doing any favors for their Tier 2 and 3 CDMA carrier customers.

That’s one of the messages the smaller operators are trying to communicate to their handset vendors. Over two years ago, a group of Tier 2 and 3 CDMA carriers formed the Associated Carrier Group (ACG) to collaborate on efforts to get handsets on a more timely and competitive scale.

Cellular South President Hu Meena served as chairman, with other charter members being First Cellular of Southern Illinois and Midwest Wireless Holdings. Alltel Wireless has since acquired the latter two, and carriers such as Bluegrass Cellular, Carolina West Wireless and Illinois Valley Cellular have joined the ACG.

PROGRESS
To a large extent, those early efforts were effective. The group even got its own exclusive handset in 2005 with the Kyocera Slider Remix KX5, a feature-rich, music-enabled phone. But the onset in recent years of more exclusive deals going to the larger carriers is taking its toll. Some even say such deals smack of anti-competitiveness, although executives at smaller carriers also acknowledge that as the Tier 1s grow ever larger, handset makers understandably see a chance to target a larger percentage of the market.

A similar but less formal group of GSM carriers negotiate deals with handset makers as well, according to Suzanne Lowry, executive director of pricing, planning and product management at SunCom Wireless. SunCom, a GSM carrier in the Southeast, managed to be one of the first carriers to offer the Sony Ericsson W300 and W810 Walkman phones, and the BlackBerry Pearl, introduced by SunCom in March, is proving to be a popular product, Lowry says. The carrier doesn’t offer the Motorola Q, which was exclusive to CDMA carrier Verizon Wireless when it first launched the device in May 2006, but that has not been an issue for SunCom, she says.

Meanwhile, ACG has given handset vendors one point of connection with the smaller carriers, thereby saving them money, and it opened up doors for better phone prices for the smaller operators, says Pat Riordan, president and CEO of Green Bay, Wis.-based Cellcom, which serves north of 200,000 wireless customers.

Meena agrees the group has made progress. “We’ve made a bad situation better, but it’s still not optimal,” he says. The optimal situation would be getting handsets and devices at the same time they’re being shipped to competitors, whether they be national CDMA or GSM carriers. “Handsets are so important these days,” Meena says. “You need to offer the latest and greatest.”

Getting handsets on a more timely basis always has been an issue for CDMA, which involves more engineering complexities than GSM. Even larger CDMA operators are still waiting for Research In Motion’s (RIM) CDMA version of the BlackBerry Pearl. But the situation is worse for smaller operators, because the fewer phones an operator buys, the less handset makers want to make the necessary engineering modifications.

ACG caught the smaller carriers up to some extent with larger CDMA carriers, but GSM still gets the shiny new toys first, Meena says.

GSM-based Cingular Wireless, now AT&T, had the Motorola RAZR about a year before some smaller CDMA carriers. And while Nokia has been a “huge friend” to operators serving smaller areas, it decided to discontinue building CDMA phones for the North American market. “We hate to see them pull out,” Meena says.

Cellular South is proud of its CDMA network, and “once the phones are there, they work great,” he says. The carrier selected CDMA when it was using TDMA, back when the typical path for TDMA was to GSM. It’s too early to make a decision, but if the situation doesn’t improve, Meena says he might consider swapping out the CDMA network for GSM. Handsets are becoming so much more important nowadays that getting the latest and greatest offerings is crucial. “We’re going to do whatever our customers want us to do,” he says.

Riordan isn’t ready to go that far. Cellcom is in the process of rolling out EV-DO Revision A in its markets. “We’re OK being a little behind them [nationwide carriers], but we never want to get too far behind them,” he says. With CDMA and GSM converging, the situation may improve down the line. “Even though they’re not the same product, once they get to 4G, I think it’s going to be easier,” Riordan says.

MORE BANG
Of course, handset makers want to take advantage of the biggest distributors to get their products out there, says Ken Hyers, an analyst at Technology Business Research. Building up buzz is important, too, and handset makers know the big operators will heavily support their marketing and advertising. “Unfortunately, that’s how it is, whether it’s RAZRs or razor blades,” he says, with the largest distributors attracting the suppliers.

That said, many of the exclusives these days are “pseudo” exclusives, where one carrier may get a device a little sooner than others but the only differentiating factor is color or some feature, like push-to-talk. At the other extreme, MVNOs like Helio are getting devices made specifically for their own services.

While it doesn’t look as though exclusive handset deals will disappear any time soon, smaller operators are left with expressing their views to their handset OEM partners individually and through ACG. “We deal with it and we know it’s out there and it’s always going to be out there in some form,” says Barry Nothstine, director of marketing and product development at Bluegrass Cellular.

But smaller carriers also hope to convince handset OEMs that if they build phones for all carriers instead of exclusively for one, their slice of the pie will grow even bigger.


http://www.wirelessweek.com/article.aspx?id=146316

[strunke]

In other news.......... post 1,000 for hf1khal right above this one!!!

[Quint101]

Wirelessly posted (Q's Mobile Device: SCH-A930 UP.Browser/6.2.3.2 (GUI) MMP/2.0)

These are some interesting posts. I never knew how hard it is for a smaller carrier to get the hottest phones... The private label phones post is also interesting. I know that Verizon brands a few Pantech phones. I've only seen a few people with them though.

[MOTOhooligan]

I wish that, in addition to phones directly from carriers, you could purchase a phone at, say, a Motorola store that wasn't carrier-branded.

Then you could download the firmware updates (like MMS, web, etc.) that you wanted for your particular carrier. Don't want to use T-zones? Then don't download it to your phone. Don't need MMS? Don't download it.

Carriers would never really go for that in the states, though. Personally I don't like it when a phone I want is a available in GSM (my technology of choice) but not for my carrier. The whole exclusivity thing bugs me. I'm glad the AGC is around to help with that. I always sort of wondered how the smaller CDMA carriers got the RAZR V3c pretty much as soon as the CDMA version was released.