Tablets Are Future Cash Cows for Carriers: Report
The mobile app market over the next four years is slated to continue its explosive growth trajectory, while e-readers and tablets are poised to outpace smartphones in terms of future wireless subscription revenue. But that doesn't mean smartphones are losing any ground in the mobile sector -- handset shipments are on tap to surpass computers again this year.
E-readers, tablets to top wireless data marketOn the wireless data front, mobile analyst Chetan Sharma, of Chetan Sharma Consulting, just issued a report revealing that the subscription market dynamics are shifting in new ways. Connected devices such as tablets, e-readers, and so on are now 7 percent of subscriptions, the fastest growing category, and are surpassing the earnings from paid and prepaid phone subscriptions. "Of all the segments, the connected device category registered the highest growth at 55 percent while the postpaid subscriptions grew by only 3 percent for the calendar year," says Sharma in the report. Furthermore, Sharma says that connected devices will continue to be the biggest money-makers for carriers, growing to double-digit market share by the end of the year. Still, he says that carriers need to start moving to multi-device data pricing plans to capitalize on the trend.
"Monthly data plans make sense for enterprise users but not for consumers who might use these devices occasionally. As such tablets will be more successful in direct and traditional retail channels. Operators who start to bundle multiple devices by single data plans and data buckets are going to see a better yield in this category." Sharma echoed other research that shows smartphone shipments outpaced computers for the first time at the end of last year -- smartphone manufacturers shipped 100.9 million devices in the fourth quarter of 2010, while PC manufacturers shipped 92.1 million units worldwide, according to IDC. Sharma says the trend will continue over the next 12 months. "In 2011, the smartphone segment along with the connected devices (tablets and eReaders) will not only exceed the computer segment in unit shipment but more importantly in the overall revenues as well," he says. Overall, the US wireless data market is doing well, with $55 billion in data service revenue for 2010, expected to jump by 22 percent to $67 billion this year, according to the report.