For Nokia-Siemens, Ericsson, Motorola and Friends, a Drop in Growth Predicted
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Nokia-Siemens, Ericsson, Motorola and other wireless infrastructure vendors are expected to pull back expenditures by 6 percent in 2009. The first part of this, says ABI Research, is due to market saturation in the industrialized regions. The second is due to competition from Chinese vendors. The good news, however, is growth opportunities in emerging markets.
Nokia-Siemens,
Ericsson, Alcatel-Lucent, Motorola and other wireless infrastructure vendors
should brace themselves for a difficult year, says ABI
Research. A new report is predicting a 6 percent reduction in expenditures for
2009.
The cause for this is twofold, according to ABI.
The first part is that 2G and 3G coverage is approaching maturity in the
industrialized world. While there's a lure for 3.5G and 4G, 3.5G upgrades, a
statement from ABI says, "are more
incremental in value."
While upgrades to 4G will eventually be a boon, spending on that equipment is
not expected to happen in meaningful numbers until the 2011 through 2015
timeframe.
The second contributing element is that incumbent providers such as
Nokia-Siemens and the others listed above face big competition from the Chinese
market, both in price and innovation.
Chinese vendor Huawei
is particularly one to watch. In 2005 it held 5 percent of the market share,
which by 2008 it grew to 12.5 percent, representing $18 billion in telecom
sales for 2008-which put it in third place.
The bright side for these vendors is the potential for growth in developing
areas. ABI sees opportunities for 3G growth
in Asia, South America, the Middle
East and Africa. Carriers are still very
much expanding their footprints in these regions, and voice and messaging
traffic are the main drivers.
Nokia, for example, recently released a new phone to "emerging markets." The
Nokia 5030-unlike the MP3-playing Nokia
5800 XpressMusic in the United States-features
an FM radio. In the regions it's intended for, Nokia said in a statement, radio
is a "main source of entertainment and news."
