Mobile industry projected to drive $1.3T globally by year's end

With more than half of 2011 behind us, Chetan Sharma Consulting is projecting the mobile industry to drive $1.3 trillion in activity by year’s end. Mobile data is expected to comprise 24% of that market with revenues cresting above $300 billion worldwide for the first time. Moreover, non-messaging data revenues are expected to make up the majority of overall global data revenues at 53%.
“The global mobile industry is the most vibrant and fastest growing industry,” Sharma begins in his State of the Global Mobile Industry half-year assessment.
Wireless subscriptions are expected to surpass 6 billion by the end of the year, driven largely by China and India where a cumulative 75 million new subscriptions are being added every quarter. Sharma notes that both countries are still locked in a race to the first billion subscribers. Both countries are expected to exceed that mark by the second quarter of next year, but India is expected to pull ahead of China by then as well. By this time next year, China and India will comprise 31% of all accounts worldwide.
Looking back on the first half of the year, Sharma notes that the United States became the first market to exceed the 50% mark in smartphone sales during the first quarter while the global figure stands at 26%. Some operators expect 90% of their device sales to be smartphones by the end of the year, he added.
Thanks to that growth, Sharma predicts 47 operators will be driving more than $1 billion a year in data revenues by the end of the year.
Carriers and other stakeholders are addressing the data tsunami with two approaches, Sharma concludes. One is to “take advantage of the data being generated in a way that enhances the user experience and provides value and the other is in technologies that help manage the traffic data that will continue to grow exponentially,” he wrote.
“New technical and business solutions will be needed to manage the growth and profit from the services. Relying on only one solution won’t be an effective strategy to manage rising data demand. A holistic approach to managing data traffic is needed and our analysis shows that the cost structure can be reduced by more than half if a suite of solutions are deployed versus a single dimensional approach and thus bringing the hockey stick curves of data cost more in line with the revenues and thus preserving the margins.”
Sharma also made some key points about devices, namely Apple Inc.’s (AAPL) staying power in the tablets space and challenges facing Nokia Corp. (NOK) and Research In Motion Ltd. (RIM).
“Apple has had the tablet space to itself. Thus far the response from the competitors has been tepid especially on the pricing dimension. Apple has had such a mastery over the supply-chain and months ahead of the competition that by the time they figure out details, Apple already locks up the pricing advantage for the cycle,” Sharma writes. While OEMs try to catch up on iPads features, they’ve been unable to compete on the margins.
“Nokia and RIM are under severe market scrutiny as investors and developers leave in droves. Lack of product planning and execution has left their market share in disarray. Nokia’s valuation has been cut into half while the newcomer HTC edged past the industry giant in a remarkable story of the year. Nokia’s release of N9 shows the engineering and creative design depth but a lot is riding on the first generation of Nokia Windows Phones. While the market hasn’t shown much appetite for Windows phone thus far, a good family of devices might be able to slow the loss trajectory and position the combined team for the up-for-grabs 3rd spot in the ecosystem,” he continued.