Motorola to lead in low-cost handsets

Motorola is likely to dominate the ultra low-cost handset (ULCH) segment of the mobile market, according to Gavin Byrne, author of a new Informa report.

He says: “Due to its experience, relationships and market knowledge gained
with the [GSM Association’s] Emerging Market Handset Programme, Motorola is likely to dominate the ULCH segment until 2007.

“While this may not encourage significant innovation, [Motorola CEO] Ed Zander's 1,000 day target for Motorola to become the number one vendor in terms of handset shipments may drive the company to own the segment, obliging it to produce the most compelling ULCH.”

The GSM Association’s low-cost handset progamme has extended its endorsement of Motorola as Emerging Market Handset Programme vendor for another six months from July 1 2006.

Competition is likely to increase, however. At 3GSM in Barcelona last month, Nokia also said it would be investing in low-cost handsets.

Informa’s Ultra Low-cost Handsets report points out that reductions will also be needed in distribution, retail and operator costs – perhaps through greater consolidation among handset vendors - for the ULCH segment to take off.

Assuming low-cost handset prices fall from about $40 now to $28 in 2010, Informa predicts that sales of new ULCHs will pass 36 million in 2007 and reach almost 48 million devices in 2010, representing 5.3% of total new device sales by 2010.

http://www.motorola.com
http://news.bbc.co.uk/1/hi/business/4270681.stm
http://telecoms.msgfocus.com/c/1yckJM2pr7q4CjS
http://www.nokia.com