Handset vendors are starting to mutter confidently of 4Q-2009 cash tills jingling to the tune of robust handset sales. In 3Q-2009, North America and Asia-Pacific helped to spearhead a recovery. In North America, the avid enthusiasm for smartphones was the driver. In Asia-Pacific, recovery in the local economies has been stoking interest in upgrades.

Market shares are starting to thaw. Nokia saw its market share slip from 38.3% to 37.3% in 3Q-2009. Samsung continues to steam ahead, raising its market share to 20.7%. Despite some very novel handset model introductions in 2Q-2009, LG’s market-share softened in 3Q-2009 (10.9%). All the other vendors either held their ground or lost a small amount of market share. The prime exception is Apple: its iPhone range of smartphones increased its market share from 1.9% to 2.5%. There have been arguments that Apple’s limited handset line-up will constrain growth, but for the mid-term, ABI Research does not expect any slowdown in Apple’s market-share growth.

“Despite the successes of the iPhone operating system, the leading player in the smartphone OS market is still very much Symbian (48%), followed by Blackberry (18%),” notes practice director Kevin Burden. “The ‘dark horse’ in all this is Android.” This week Motorola announced the launch of its navigation-friendly “Droid” handset. As the list of vendors committed to releasing Android handsets expands, product momentum should translate into increased Android sales. ABI Research estimates Android could capture 10% of the smartphone market by 2014.

Smartphones are not the only handset segment to drive the market. GPS is also becoming a very desirable feature of handsets. By the end of 2009, ABI Research estimates, 21% of all handsets shipped this year will have onboard GPS.

For more about worldwide mobile device markets, please visit ABI Research’s “Mobile Devices Vendor Share” and “Mobile Devices Market Forecast Analysis” which track the above data. Both are components of the firm’s Mobile Devices Research Service.

Respondents were asked whether they’d be more likely to purchase mobile services or mobile handsets from an operator that makes use of ‘green’ initiatives, which were described as:

“…gives money to organization seeking to help the environment, actively employs programs that reduce its carbon footprint, buys network equipment from ‘green’ equipment vendors.”

Paying more than just lip service, 41% (for services) and 45% (for devices) of the 1,000+ respondents indicated that they’d be significantly or somewhat more likely to do so. Younger consumers showed a greater willingness to pursue “eco-groovy” mobile activities than older ones.

“Wireless operators take notice,” says senior analyst Jeff Orr. “Green issues were not even a talking point a couple years back. Now, subscribers of all age groups are expressing awareness of and interest in eco-friendly device and service incentives.”

The service providers first to connect with environmentally conscious businesses and consumer subscribers will have an edge in this growing trend. Additional education remains necessary to communicate issues surrounding battery disposal and the accumulation of e-waste.

“ABI Research estimates that worldwide handset shipments will fall by at least 8% in 2009,” says practice director Kevin Burden, “and we believe that flat growth in 2010 is the best the market will deliver. We will see neither significant growth nor decline in shipments, and that would actually be a good outcome: the beginning of the upswing back to a more stable growth pattern.”

Even if global shipment numbers hold steady at essentially 2009 levels, there will be regional variations. Some regions such as the Middle East and Africa will fare comparatively better, but volumes there are quite low.

The Asia-Pacific region will suffer most in 2009, primarily as a result of its huge volume of shipments – roughly triple the next largest region. And stabilization – if it comes – will arrive there a little later than in North America and Europe, resulting in a 2010 forecast that still shows a minimal decline in shipments, while other regions may enjoy a minimal positive growth.

“There are telltale signs that at least some parts of the handset ecosystem may be starting to steady,” Burden adds. “Many handset vendors are replacing component inventories after reducing them to very low levels in recent months to keep from overextending as the market dropped. This doesn’t necessarily mean the whole market is doing better, but it is good news at least for the component suppliers, some of which were really suffering.”

There’s an important distinction to draw between content streamed to mobile handsets over cellular networks, and free-to-air broadcasting to mobile devices equipped with mobile TV tuners. “Mobile TV users have yet to value the medium properly because it has not been validated as an independent product and service,” says senior analyst Jeff Orr. “It has been primarily offered at the end of a long list of more preferred cellular services. However, Mobile TV will soon be positioned in a more proper role as an extension of traditional broadcast TV services.”

“Mobile TV viewing will not solely be on cellular handsets,” Orr continues, “but also on MIDs,and automotive infotainment systems. I believe that once the content is available and the services launched, mobile TV will enable more classes of mobile devices that are ‘natural fits’ for mobile entertainment.”

ABI Research believes the timing of the market’s emergence is good. As 2009 progresses, signs of economic optimism may emerge, and allow the fledgling industry to establish a foothold before the holiday shopping season.

ABI Research’s new study, “The Mobile TV Market” provides an overview of the global mobile TV market, including the key technologies, services, content, devices, network infrastructure and business models, including market forecasts and strategic insights.

“The number of WCDMA and CDMA2000 mobile handsets sold (currently 39% of the total) is expected to exceed 50% in 2009,” says ABI Research Asia-Pacific vice president Jake Saunders. “Much of the brunt of the economic downturn will be experienced in the 2G categories. WCDMA handset shipments are projected to grow from 258 million in 2008 to 725 million in 2009. By 2013, more than 67% of all handsets shipped will be 3G/3G+ capable.” 

“Another robust segment is smartphones,” adds practice director Kevin Burden. “Smartphones captured 14% of the 2008 market and are expected to grow throughout the challenging period of 2009 and comprise 31% of the market by 2013.” Smartphones are among the most coveted pieces of prosumer electronics. 

Cellular modems will also be a high growth sector in 2009, driven largely by USB modems which will account for 80% of the shipment volume. Market volume is expected to increase by more than 55% in the coming year as Asian vendors push forward with low-priced modems. 

Operators continue to be creative with broadband plans to entice new users, offering options such as a free month with a modem purchase, as well as daily and weekend plans and per MB fees. “For as long as operators aggressively price and promote mobile broadband plans, cellular modems will continue to be a hot category with considerable potential in SOHO and SMB segments,” concludes Burden.

“About half of all purchases made by consumers last year were made with cash,” notes ABI Research senior analyst Mark Beccue. “Consumers would in many cases prefer cashless transactions when away from home. So around the world solutions providers have leveraged SMS, mobile Internet and downloadable mobile applications to enable mobile commerce and payments. ABI Research calculates the potential revenue in 2013 from mobile transactions using these methods at about $18 billion: a significant opportunity for payment processors.” 

A new ABI Research study examines the potential for mobile payments in four key vertical markets that will drive adoption: taxis, parking, movies, and Internet shopping. While the latter is usually done using credit cards anyway, the first three are areas in which mobile payments could replace cash transactions. The research found that Internet shopping would account for almost three quarters of this mobile commerce revenue in 2013. A further 15% would come from parking, with the balance split about evenly between taxi fares and movie tickets. 

Beccue concludes, “Companies already seizing this mobile payment opportunity include parking solutions provider Verrus, Bharti Airtel and movie theater operators in India, and notably eBay and Amazon – the world’s largest e-commerce merchants – which have enthusiastically embraced mobile transactions with very comprehensive offerings.” 

The new ABI Research study “Mobile Commerce and Payments” examines several emerging markets in which consumers are or will be using their mobile devices to purchase goods or services using SMS and mobile Internet. It highlights important players within the space, suggests who should play and who will benefit, and outlines what MNOs, merchants, and financial services providers can do to take advantage of these opportunities.

While mobile phones can be viewed in part as fashion accessories, they also impart other value propositions that are highly valued by end-users. Substantial improvements in key functional areas (e.g. memory, battery life, data speed, processor speed) are being noticed by end-users. Still, many are opting to remain on open contracts rather than upgrade their handsets and lock themselves into down payments for new phones and potentially expensive monthly commitments. 

ABI Research has revised its expectations for 4Q-2008 down to 7.5% growth from 10.4%. Year-on-year annual growth is therefore likely to be between 10.5% and 11%, to close out the year at around 1.27 billion. 

“There are winners and losers in 3Q-2008″, notes research director Kevin Burden. “Nokia stumbled slightly to see its market-share shrink to 37.7%. Motorola and LG were also net losers (total market-share: 8.1% and 7.4%) respectively. Winners include Samsung (16.6%), Apple (2.2%), and RIM (2.0%). Smartphones are truly capturing the imagination of the buying public which is benefitting vendors with highly desirable smartphones.”

Nokia may well claw back some of its lost market-share as it now has stronger products in the smartphone category. Nokia would have fared worse were it not for its strong line up in the mid-tier and low-tier handset segments, which is where LG and Motorola felt the impact. Despite some barraging in the media, SonyEricsson managed to keep market-share constant at 8.2%.

ABI Research vice president Stuart Carlaw says, “Solar power will first be used in conjunction with other primary energy sources such as diesel or grid-based electricity, but will increasingly be seen as a primary source for autonomous cell sites.” Carlaw adds that, “The market for autonomous solar powered cell sites looks set to grow from extremely modest levels today to over 40,000 renewable energy sites by the end of 2013. A further 295,000 base stations are expected to supplement on-grid power usage with solar.”

Solar power is at the leading edge of renewable energy’s drive into the mobile network domain, but other interesting opportunities are on the horizon. Wind power has potential in areas that receive less solar energy, but is less predictable. Fuel cells and compressed air hold significant promise for the long term.

According to principal analyst Dan Shey, “South Korea and Taiwan are frequent video services users, so devices with larger screens can leverage device screen real estate for other multimedia content and services. UK respondents text message significantly more than other nations’ mobile business customers and a high percentage of their usage is for personal reasons; UK operators will want to use improved keypad options for more interactivity, perhaps through advertising or with major brands.”

Device feature interests can also help businesses improve their productivity. Adds Shey, “Use of handsets to access corporate data is still low, averaging about 12% of the survey respondent base. Greater device capabilities can lower the barriers for businesses to leverage corporate data for the benefit of their mobile employees.”

According to ABI Research director Kevin Burden, “If Android is to become the ubiquitous mobile phone platform that Google and the Open Handset Alliance hope it will be, it will be because operators and handset OEMs recognize the value to their own business models of using standard platforms, not because wireless subscribers clamor for feature-rich phones, much less an Android-based phone.”

The current smartphone market accounts for only 14% of worldwide handsets. That doesn’t help Google’s aspirations to have a platform used by a wide population to whom they can market their services. Google needs to convince handset manufacturers to replace the real-time operating systems that now power the majority of mobile phones. In the smartphone market of the future, users won’t always be aware of what they’re buying: they will buy simply because they’re in the market for a phone, not specifically a smartphone.

The challenge is to convince operators that having more phones in their lineups and more subscribers using those phones based on standardized operating systems is good for them. Standardization delivers easier manageability at the technical level and greater ease in marketing services to all their subscribers.

“The smartphone market has been moving in this direction for some time now,” Burden continues. “If Android is a success, it may be the tipping point that marks the start of a profound change in the smartphone market.”