- Analyst Publishes Wireless Projections Handbook for Investors -
PORTLAND, Maine, May 29 /PRNewswire/ -- Although he expects low double-
digit year-over-year growth in both global wireless subscriber (14.3 percent)
and handset (11.3 percent) rates in 2003, U.S. Bancorp Piper Jaffray Senior
Wireless Communications Equipment Analyst Samuel May believes the demand for
wireless infrastructure will decline by 14.8 percent for the same period. In
a new in-depth research report titled 2003 Global Wireless Projections-The
Book, May makes forecasts such as these and outlines his expectations and
outlook for the wireless industry for 2003 and 2004. This includes forecasts
for wireless subscribers, wireless handsets and wireless infrastructure.
In 2002, wireless subscribers grew by 198 million, down from 224 million
net additions in 2001. At the end of 2002, wireless subscribers totaled
1,152 million, up from 954 million in 2001. For year-end 2003, May is
forecasting 1,317 million wireless subscribers or net additions of
165 million, which represents growth of 14.3 percent year-over-year.
Additionally, in 2004, he anticipates net additions will decrease to
140 million and worldwide subscribers will total 1,457 million (10.6 percent
According to May, net subscriber additions in the United States in 2003
are expected to continue to slow, as the market is expected to surpass the 50
percent penetration mark and reach late stage maturation. He is forecasting
net additions of 10 million subscribers for the region in 2003. Additionally,
China is expected to remain the fastest-growing country with 55 million net
additions in 2003, versus 62.0 million in 2002. Code division multiple access
(CDMA) is expected to represent 11.0 million of net additions in 2003. India
exhibited record growth in 2002 with 5.0 million net additions, up from
2.4 million in 2001. May is forecasting 11.2 million net additions in the
region in 2003. Other regions expected to grow nicely in 2003 include Brazil
Post first quarter results, May's mobile phone forecast for 2003 remains
unchanged at 445 million, which represents 11.3 percent growth from more than
400 million in 2002. In 2004, he expects mobile phone sales to grow by 13.5
percent to 505 million.
May believes the rate of handset replacements will make substantial gains
in 2003. The replacement rate is expected to improve to 24.3 percent, versus
21.2 percent in 2002 and 21.4 percent in 2001. In absolute terms, this implies
the sale of 280 million handsets in 2003. In 2004, he expects the replacement
rate will climb to 27.7 percent, with 365 million replacement handsets sold.
"The catalysts fueling replacements include the increased introduction of
color handsets, embedded cameras, MP3 players and value-added features such as
global positioning systems and gaming," say May. "Additional catalysts
include the replacement of old, outdated phones, many of which are two-plus
Additionally, May expects handset manufacturers such as Nokia Corporation
(NOK, Outperform, $17.76, #), SAMSUNG and LG Electronics to grow over coming
years. "While original design manufacturers (ODMs) are expected to represent
a disruptive force over the next couple of years, we believe a dichotomy will
emerge between strong and weak ODMs with the latter beginning to fade away as
insufficient unit volumes for smaller players are unable to support viable
business models," said May.
In 2003, May expects the demand for wireless infrastructure to decline by
14.8 percent (compared with industry expectations of 10-15 percent), as first
quarter 2003 results for equipment suppliers were worse than expected and
declined by 20 percent year-over-year.
In May's opinion, service providers will maintain a conservative posture
with regard to capital investment in 2003, as many remain focused on improving
internal financial health of operations and balance sheet metrics.
"Investment in wideband-CDMA (W-CDMA) equipment will continue to languish
into 2004, as carriers seek validation for the demand of data services before
moving forward with investments," said May. "That said, we believe
infrastructure spending will reverse its four-year decline and return to
modest growth in 2005."
To receive a copy of 2003 Global Wireless Projections-The Book, clients
and members of the media should contact Dana Wade at firstname.lastname@example.org or
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