New Cellphone Suppliers, 4G Phones Coming To International CES

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LAS VEGAS —

An accelerating technology-driven replacement cycle is driving cellular’s growth in the face of slow economic growth and is prompting more suppliers here at International CES to enter the market, others to maintain their pace of product introductions, and other companies to launch cellphone-connected products that add such features as ATSC-M/H (Mobile/Handheld) DTV reception.

Multiple companies will also launch 4G cellphones, USB modems and mobile hot spots equipped with 700MHz LTE (Long-Term Evolution) for the Verizon Wireless network.

Three cellular newcomers are Vizio, ViewSonic and Korea’s Enspert, all entering the U.S. cellular market with Android phones.

For its part, Novatel Wireless will show its first 4G MiFi Mobile Hot Spot and its first U.S.-market 4G USB modems. All are due in the first quarter, but it wasn’t certain at press time whether they would incorporate the Mobile WiMAX or LTE 4G technologies.

For its part, GreatCall will launch a new cellular service. In cellular-related products at the show, attendees will find:

• at least two new devices that add mobile ATSC-M/H DTV reception to an iPhone or iPod Touch. They’re from Valups and Cydle.

• at least one device that turns tablets, iPod Touches and other devices lacking GPS into portable navigation devices (PNDs). The product, from Dual, also improves the accuracy of cellphones with embedded GPS.

In a related development, the Open Mobile Video Coalition said it is encouraging Nokia to bring out a wired hands-free headset with embedded ATSC-M/H tuner, turning any smartphone with a USB port into a portable DTV. Nokia already offers such as product in Europe with embedded DVB-H DTV tuner at 40 Euros for use with an app for Symbian-OS phones.

The developments come amid optimistic forecasts from many marketers that handset growth will continue into 2011 following 2010 and 2009 growth. In 2010, growth was driven by the economic recovery, smartphone demand that is accelerating the replacement cycle, resumed net-new subscriber growth, and expanding prepaid options, marketers and analysts told TWICE.

The market has been so resilient that North American sell-in during the depths of the recession in 2008 fell only 1.6 percent in units, rebounding 4.4 percent in 2009, according to Strategy Analytics.

This year, the value of cellphone shipments could grow faster than unit growth, given the growing share of smartphones. Smartphones’ unit share of cellphone sellthrough in North America will grow to 42 percent in 2011, from 35 percent in 2010, according to Strategy Analytics.

Sales of smartphones will continue to rise as carriers launch lower-priced models and market new tiered data plans with lower cost options, marketers told TWICE. Carriers are also driving smartphone adoption as “operators continue to heavily subsidize smartphone devices in an attempt to drive data-service adoption,” said Patrick Stokes, president and COO of Brightstar U.S. and Canada

The growing affordability of smartphones will also drive up smartphone share, marketers said, as new low-cost models hit the market at $49.99 and less and more tiered data plans are launched, allowing for data-plan options that are less expensive than the $29.99/month all-youcan eat plans that had been alone in the market.

The prospect for continued industry growth was a significant factor in enticing ViewSonic to enter the market here, said Adam Hanin, marketing VP for the Americas. The ability for consumers to customize the functionality of their phones with apps is encouraging consumers to turn in their old phones, and continued technology improvements will continue to fuel the replacement cycle, he said.

For ViewSonic, entering the cellphone and tablet markets was a natural extension of its expertise in displays, including TVs, PC monitors, business projectors and digital signage, Hanin added.

Although 4G also commands consumer and industry attention, most markets don’t expect 4G handsets to grab much share in 2011 because 4G networks are still in their infancy. That, however, will change in the years ahead, most marketers said. 4G will also become a key feature in such connected devices as tablets, mobile hotspots, e-readers and other machineto- machine (M2M) devices, some added.

4G will also open up the market for entertainment services to the handset, with Verizon Wireless already having said that video would play a key role in its 4G launch. Said Mark Louison, president of Nokia North America, “With faster data speeds and reduced network latency, we expect further enhanced real-time video and true multimedia experience, a high-performance environment for mobile, and support for real-time applications due to its low latency,” he said.

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