Evolution of Mobile Handsets

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Evolution of Mobile Handsets and

the Impact of Smartphones

February 2012

Yoko Miyashita

InfoCom Research, Inc.

Lecture Document


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Todays Lecture Outline

Mobile handset history outlook:

Handsets have changing dramaticall y especially in this decade.

What are the future phones l ike???

Industry structure is changing after the growing smartphone

populality Handset development trend is also changing with the smartphone

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Feature Phone vs. Smartphone

Smartphone? OR Feature phone?

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Mobile Handset Market Overview

4


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Global Mobile Subscriber Number & Penetration History

0

1,000

2,000

3,000

4,000

5,000

6,000

0%

10%

20%

30%

40%

50%

60%

70%

80%

in million

Subscriber Number

Net increase

Penetration Rate

u

s

b

e

s

e

n

t

a

o

n

12/200512/200012/1995

Source: US Census Bureau, Informa and 4G Americas. As of September, 2011

12/2010

5.4 billion mobile phone subscribers and 77% of mobile penetration, globally

5


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2,624

859

121

328

569531 511 538

287

69.6% 64.4%

95.2% 95.3%

96.1%

129.3%

127.0%

53.1%

89.8%

0100200300400500

600700800900

1,0001,1001,2001,3001,4001,5001,600

1,7001,8001,9002,0002,1002,2002,3002,4002,5002,6002,7002,800

0%

20%

40%

60%

80%

100%

120%

140%

MILLION

Mobile Subscriber and Penetration Rate by Region

Source: Informa and US Cencer Bureau

As of December2010

AsiaPacific

China Japan NorthAmerica

SouthAmerica

WestEurope

EastEurope

Africa MiddleEast

Subsc

riber

Pe

netration

Subscriber

Penetration

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Handset Market Structure

High-end/Smartphone

Middle range

Low Endincluding ultra low end

One of the best selling phone in historyMarket Structure

Price range and its volume

Price$ 800

Price$ 20-50

Low end

Black-white display

86 gram

SMS

Color variation

Target: emergingmarket

NO InternetNO Camera

Nokia 1100

Price$ 300

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ZTE

5 5

RIM

3 5

Huawei

3 9

Apple

5 7

LG

6 9

Samsung

20 7

HTC

3 3

Motorola

3 0

Nokia

24 7

Others

22 9

Mobile Handset Share by Vendor

Source: Strategy Analytics

Vendor Shipment

(Million)MarketShare

Nokia 88.5 24.7%

Samsung 74.0 20.7%

LG 24.8 6.9%

Apple 20.3 5.7%ZTE 19.6 5.5%

Huawei 13.9 3.9%

RIM 12.5 3.5%

HTC 11.9 3.3%

Motorola 10.6 3.0%

Others 81.9 22.8%

Total 358.0 100.0%

Mobile Handset Shipment Based Vender Share 2011.2Q(April to June)

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Evolution of Mobile Handset

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Evolution of the Cell Phone

Miniaturize Functionalize, Thin/High Speedmail, camera, data internet cloud

Motorola

DynaTAC

Approx. 1kg

Nokia 1011

495g Motorola

StarTAC

88g

Sony Ericsson

P800smartphone

158g

RIM

BlackBerry Quark 6210

smartphone

136g

Apple

iPhone 3G

smartphone

140g

1983 1990 2000 2007

1st generation 2ndgeneration 3rd generation

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Characteristic of the 1st Generation

Period: From 1980s to 2000

Analog based mobile network

No data communication, only SMS

Heavy and bulky handset

Extremely expensive, starting from $1,000

Miniaturize is the most important fordevelopment

Targeted only for the business and forspecial segment

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Mobile Handset History: 1stGeneration

1983 1993 1996 1999

Handset Trend Transition

Source: GigaOM and Newgrounds.com 13


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Characteristic of the 2nd Generation

Period: From appx. 2000 to 2007

Mobile phone for the mass peopleRelatively slow data connection/ Internetusage by phone

Golden time for handset vendors:handset vendors were the most influential and powerful

Various kinds of handsets

Handset development environment isrelatively closed

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Mobile Handset History: nd Generation

HighEnd

LowEnd

Handset Design Trend Transition

2000 2001 2002 2003 2004 2005 2006 2007

Nokia 3310:

133g Nokia 1100:86g

Nokia 6310:111g*withUltra Slimbattery

Nokia 3410:

114g

NEC L1:11.9mm *

Motorola V60:

109g

Motorola

V70:83g

MotorolaV600:115g*

*Camera

Touch display

Panasonic A100:

66g:

SamsungSPH-V9900:6.9mm *

Smaller Multimedia Design/ Thinner

VK Mobile:48g:

SamsungU100:5.9mm *

LGChocolate:

15.2 mm*

MotorolaRAZR v3:13.9mm*

LGPRADA phone:12mm*

SamsungP520 :8.9mm *Sharp

GX10:110g*

nd

Generation: Handset vendors have the strongest power

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U i F t h


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Unique Feature phones

Xelibri

74 gram

139Euro

Xelibri

83

17923,800

Xelibri 8

Neck less Type

NO button(Voice Recognition)

179Euro

Xelibri by Simens, was one of the most unique series of handset

Commercial Image

Xelibri 6

Compact type

90 gram179 Euro

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U i F t h


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LG F7100 Qiblah

Phone for Muslim Community

Unique Feature phones

Qiblah by LG Electronics, was one of the best selling feature phones by LG for Islamic peopl

Points the direction of MECCA

With the Compass function)

Make alerts 5 times a day to pray

Arabic language

SMS/MMS capability

LG

s best selling feature phone

* LG

s s strategy to carter for the

specific needs of the Muslim people

Weight

Display

Talking

time

Waiting

hour

Technology

Release dateJuly, 2004

89g

LCD65K Color

GSM900/1800/GPRS

210 mim

200 hour

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Ch t i ti f th 3 d G ti


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Characteristic of the 3rd Generation

Period: appx. 2007 ~

Smartphone era

Higher speed network

More internet connectionMany new entrants to mobile handsetindustry, such as Google and Apple

Industry structure revolution

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Sony Ericsson

XPERIA X1

Nokia

N96

LG

KF-700

Almost all the high-end handset look alike after iPhone

Year 2007: iPhone released

Mobile Handset History: 3 rd Generation

Beginning of Smartphone Era with iPhone

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Wh t i S t h ?


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Industry efinition of Smartphone

Open Operation System(OS)

Specification is disclosed to the third party

Broad application development environment

Mobile network capabilitye.g. Not Wi-Fi only handset

Apple: iOSGoogle; AndroidRIM: BlackBerryNokia: Symbian

Microsoft: Windows Phone(Windows Mobile)and Linux

What is Smartphone?

Smartphone?

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Smartphone Market Projection


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Smartphone Market Projection

0

10 0

20 0

30 0

40 0

50 0

60 0

70 0

80 0

2

7

2

8

2

9

2

2

2

2

2

3

2

4

2

5

21 4

78 6

41 0

59 0

0

2

4

6

8

10

12

14

16

18

20

2

7

2

8

2

9

2

2

2

2

2

3

2

4

2

5

20152010

11 1

88 9

49 7

50 3

Global

Japan

Unit: Million

100

Data: Strategy Analytics, MCPC

Smartphone Not Smartphone

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Smartphone Industry Structure


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Smartphone Industry Structure

Smartphone has its own ecosystem

Smartphone OS providers have strong power.

Vertical integration structure: Smartphone OS provider controls the service,application and even handsets.

Service

Network

Application

OS/Platform

Handset

SmartphoneMarket share

(Email, Search,Maps)

*Smartphone market share: Top line: 2011.2Q, bottom: 20102Q22

Smartphone OS based handset market share


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Smartphone OS based handset market share

2010.2Q to 2011.2Q 2011.2Q

Android and iPhone OS are becoming two most powerful players

Nokias Symbian losing much market share

SourceStrategy Analytics 23

Data Traffic Explosion caused by Smartphone


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Data Traffic Explosion caused by Smartphone

SourceAT&T + T-Mobile: A World-Class Platform for the Future of Mobile Broadband, AT&T, March 21, 2011.

http://www.att.com/Common/about_us/pdf/INV_PRES_3-21-11_FINAL.pdf

AT&Ts iPhone brought huge revenue with the dramatically growing trafficHowever, the carriers worry to become Dumb Pipe only providing the network.

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Global Mobile Data Traffic Forecast


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SauceCisco

http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html

http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.pdf

CAGR (Compound Annual Growth Rate)


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Smartphone Application Store


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Smartphone Application Store

Application Store is the place to provides third party developed

application and contents

It makes the mobile industry even much more global

App Store by App;e Android Market by Google

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Variation of Android Smartphone


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Variation of Android Smartphone

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Mobile Handset Vendor Profit
http://androidandme.wpengine.netdna-cdn.com/wp-content/uploads/2011/06/color-yellow-en.jpg


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Mobile Handset Vendor Profit

501

2,286

11,381

754

971

820

-1,091

2,225

1

0

0

0

4

0

0

0

9

0

0

0

Apple

Samsung

Nokia

HTC

RIM

LG

Motorola

Sony

Ericsson

Year 2007

In million US dollars

9,356

3,779

4,710

1,446

2,718

-607

-198

227

1

0

0

0

4

0

0

0

9

0

0

0

Apple

Samsung

Nokia

HTC

RIM

LG

Motorola

Sony

Ericsson

Year 2010

In million US dollars

SourceStrategy Analytics. Exchange rate as of August 2011 for both charts28


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Analysis of the Mobile Phone Evolution

What are the futures phone like?

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What the Future Mobile Handset Be Like?


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SmartphonesFeature PhonesBasic Phones

What the Future Mobile Handset Be Like?

Analog

1st Generation

Voice, SMS only

Network

Handset

Category

Function

Handset itself getting more intelligent

Digital

2nd Generation

Multimediacapability

W-CDMA(UMTS)

3rd Generation

Application, PClike function

Cloud computing,handset commoditization

?

4G/ LTE Cloud computing

Next Generation

ExtremelylimitedData/Internet

Limited More internet

use,congested

Getting huge

No device

intelligence

Low device

intelligence

igh device

intelligence What do youth ink???

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The 4th Generation Handset Factor


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Half of the mobile handset will be smartphone in 2015

Mobile handsets will be more commoditized and hard todifferentiate the terminal itself

Mobile network will be getting much faster

More players flooding into mobile industry, such asinternet company, SNS, and so on

The 4 Generation Handset Factor

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What are the future mobile phones andservices be like???


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InfoCom Research, Inc.

Yoko Miyashita

Chief Consultant

www.icr.co.jp

Email: [email protected]
http://www.icr.co.jp/http://www.icr.co.jp/

Documents

Evolution of Mobile Handsets