With the constant drumbeat of the downward economy, evidence is emerging that there are distinct regional differences in mobile's economic strength across the world.
Informa recently noted that the subscribers continue to sign up for services in some of the most desperate economies of the Africa and Southern Asia, while the the over saturated and nearly satureated markets of Europe and US are in for either a quick or slow contraction. India has become the world's laregst market in terms of net adds for the first time in 2008, with 102 million new subs, exceeding China.
I'm Reconsidering my position
The Mobie Pundit-ocracy has been positioning that mobile has been resilient to the deteriorating global economy, focusing primarily on the stablilty of operators making plans to lower costs, and downsize their businesess. Handest and network equipment vendors are thought to be the first line to be effected with consumers putting off the upgrade or replacement of their handsets, with the indirect ripple effect causing contraction in the network infrastructure flattens due to differed data usage and less than expected usage rates forcing operators to delay any network upgrades.
The blank spot in most of these analyses is the complete over focus on the biggest players--those publicly held entitites or uber-mobile players such as (of course) Apple, Google, Nokia, Motorola, Ericsson and the rest, and the lacking acknowledgement of how much the industry is about to change due the lack of funds and operating oxygen smaller players are facing and how that is going to change the ecosystem. Layer on the contraction of the venture industry, and collectively mobile is likely to be a very dull and (further) disappointing segment.
The reality is that the global recession started in early 2008, with the impact in the second half of 2008, and now the blast effects worsening in 2009. Consider that the world's mobile subscription market grew by 18.5 per cent year on year in 2008, down from 22.5 per cent growth in 2007, and is set to increase by just 12.7 per cent this year. That's a 44% drop in global handset growth in 18 months.
Unsurprisingly, the world's developed markets will be hit especially hard with the total device market in Western Europe set to contract by 13 per cent in 2009, and it could take as long as three years for the European and American device markets to get back to 2008 sales levels given that replacement cycles are likely to increase by a wopping ADDITIONAL 8 mohths in 2009, moving handset holding periods approaching 2 years on average.
Lesson Here: Avoid investments in handsets and infrastructure providers, and weigh carefully any applications plays.