IDC predicts slow mobile growth for 2006

IDC predicts slow mobile growth for 2006


Buyers will not pounce on higher-speed 3G handsets, according to market watcher IDC

Mobile device shipments in Europe proved disappointing in the first quarter of 2006, according to new research from analyst firm IDC. The company warned of slow growth for the rest of this year, and that higher-speed 3G wireless services starting this summer will only see low take-up at first.

IDC blamed the recent slow mobile growth on falling demand for GPS handheld bundles, and on key vendors 'transitioning their portfolio' to new models. In particular, delays to Nokia's E-Series handsets and difficulties with Microsoft's Messaging and Security Feature Pack (MSFP) upgrade for Windows Mobile 5.0 led many businesses and consumers to delay purchasing.

Nokia continued to lead the European mobile device market with 11.8 million units shipped in Q1 2006, according to IDC. BlackBerry maker RIM also did well, while sales of traditional handhelds continued to decline.

Looking forward, growth is expected to continue to be muted throughout 2006, IDC predicted. "Don't expect to see massive growth, it will be about 9 percent overall," said Andy Brown, IDC's analyst on European mobile computing and mobile devices.

However, he added that sales of converged devices such as smartphones would continue to buck the trend and grow more strongly than the rest of the market.

Windows Mobile 5.0 handsets with MSFP have the potential to bring mobile email to more businesses, while Symbian OS 9 "will give handset makers a big chance to gain enterprise credibility," Brown said.

IDC also identified an encouraging trend for mobile trials in businesses to translate into actual adoption of the technology. This is due to better communication between device vendors and mobile operators leading to greater understanding of customer needs, Brown said, while return on investment has now become more predictable.

However, while European carriers are planning to switch on HSDPA (High-Speed Downlink Packet Access) upgrades to their 3G networks this summer, IDC said it expects adoption of this technology to be slow at first. "We feel that users are only just getting used to W-CDMA [standard 3G], so there won't be a great deal of initial interest," said Brown.

HSDPA is expected to offer wireless access speeds up to 1.4Mbit/s from compatible mobile handsets and laptops with data cards.