Wireless Phone Vendors Face New Competition

Two recent developments highlight what ABI Research sees as new threats to many of the dominant vendors in the cellular handset market. These threats are explored in the NY-based technology analysts’newest update to their “Wireless Handsets Quarterly Service“, which details global trends in wireless handsets.

Sharp Electronics Corp., long a major name in electronics from air conditioners to TVs, has increasingly been encroaching in the cellular handset market in two ways.

First, although they have not been conspicuous as a manufacturer of cell phones in the domestic U.S. market in the past, Sharp’s handsets are starting to appear there in numbers high enough toregister as a growing market share.

More importantly, Sharp has a major hidden presence in the fastest-growing segment of the handset market, because they make many of the camera modules that are incorporated in handsets from othervendors. This gives Sharp the enviable advantage of enjoying a double revenue stream from the handset market.

Lance Wilson, ABI Research’s director of wireless research, notes in passing that while Sharp has begun to take market share, Nokia has continued to lose it. The 158.2 million units the Finnish firmshipped in the second quarter, says Wilson, account for a fall to 28.7% in the past quarter.

The second trend threatening cell phone vendors sees mobile service providers increasingly writing their own specifications for new handsets and awarding contracts directly to Original DesignManufacturers (ODMs), bypassing the traditional handset vendors. How widespread or pervasive this practice will become, and how big a threat it poses to the incumbent vendors is, according to Wilson,”a matter of conjecture at this point.” But it is a real shift that they discount at their own risk.