Tablets, E-Readers, Data Bundles to Drive a Strong U.S. Data Market
Led by the Apple iPad, tablets, e-readers and other connected devices are expected to usher in a new mobile reality, and a new role for the United States on the global stage, according to a new report from independent analyst Chetan Sharma.
U.S. mobile subscriptions crossed the 100 percent penetration mark during the fourth quarter of 2010, U.S. smartphone sales were nearly twice the global average, and the U.S. wireless data market reached $14.8 billion in mobile data service revenue, bringing the year's tally to $55 billion-a figure that Sharma says will climb to $67 billion in 2011.
By the end of 2011, the United States is also expected to become the world's largest consumer of mobile data, edging past Sweden.
"There is no question that the center of gravity of the mobile market has shifted back to the U.S.," Sharma said in the report, pointing to Nokia's new partnership with Microsoft-which he describes as a multibillion-dollar offer on Microsoft's side-as an example.
"Innovation is happening all around the world, and in many areas other countries are years ahead," he continued. "The markets are growing faster in India, China and elsewhere. However, the coordinates of what's next have clearly changed in the last three years. The software innovation and the next-generation network launches in the U.S. are laying the foundation of a solid mobile decade."
According to the report, the United States is the industry's largest revenue generator-despite accounting for less than 6 percent of the world's mobile subscription base, it racks up more than 21 percent of its data revenues. Notably, in 2010, Verizon Wireless passed the decade-long leader NTT DoCoMo, and AT&T edged past China Mobile to gain the No. 3 spot.
By the end of 2013, Sharma said, the U.S. market will account for 25 percent of global mobile data service revenues.
Encouraging the connected devices market will be bundled, multidevice data pricing plans and the growing acceptance of these devices within enterprises. As such, tablets will be more successful in direct and traditional retail channels, he said.
"[The Apple] iPad (and other tablets) are making netbooks irrelevant," he said. "In fact, tablets are starting to eat into the laptop category as well. As expected, the device has been a hit with many enterprises with mobile workers. Many enterprises are giving out iPads to their workforce instead of laptops or netbooks."
Just as monthly data plans make sense for enterprise users, said the report, U.S. carriers will this year begin offering consumers multidevice or family data plans. Carriers will also begin diversifying their investments more aggressively.
"AT&T's mobile enterprise business is a leading indicator of this trend," said Sharma. "Their focus [on vertical markets] has yielded new revenue streams and is positioning them to become a one-stop shop for devices, access and services in the enterprise market."
The report also predicted that tablets and e-readers will pass the computer segment-which includes desktops, notebooks and netbooks-in both unit shipments and overall revenue.
"Of course, these categories are merging and the lines are blurring," said Sharma, "but it is good to take stock of the transition, which will create new ecosystems and decimate the old ones over the course of this decade."