There are numerous signs that touchscreens are poised to significantly increase their presence in the mobile handset market. Recent reports and announcements from the three largest mobile phone manufacturers have highlighted a trend in the increased production of phones using touch technology. In July, LG revealed that it had sold 7 million touchscreen handsets. This announcement came just five quarters after LG launched its very first touchscreen mobile phone. Showing similar success, Samsung recently released the Instinct, a full touchscreen handset, through Sprint. Just one week after the launch, Sprint announced that the Instinct had already become the best selling EV-DO device in the carrier’s history. Not to be outdone, Apple reported selling 1 million of the new 3G iPhone handsets in just the first three days of its release

According to IMS Research analyst and report author Femi Omoni, “The original iPhone was the catalyst that created this huge market interest in touchscreen phones. The fact that it was not only popular with consumers, but also helped drive data revenues proved how important touchscreen handsets can be. Now all of the network operators and handset manufacturers want a piece of the pie”.

The impressive growth that IMS Research is predicting will not be driven solely by the smartphone segment either. According to the IMS Research report Touchscreens & Input Technologies for Mobile Handsets, touchscreens will increasingly penetrate the much larger feature phone segment. In fact, Nokia just announced that its initial foray into the touchscreen market will be targeted at the “volume market” because that segment of the population is the largest consumer of mobile phones.

“There has been a marked increase in the level of activity of key players in the market, from both the mobile and the financial companies in the past 12 months”, stated John Devlin, lead analyst for the report entitled “The Mobile Wallet: How? What? Where? And When?” “In regions such as North America, Japan and South Korea strong partnerships are being formed between mobile operators and banks. In regions where banking infrastructure is much more limited in availability, battle lines are being drawn between the different stakeholders, with operators well positioned and less restricted in providing financial services to their subscribers”.

There are a number of technologies and features that could positively or negatively affect the uptake of mobile financial services. These include SMS, MMS, WAP, e-mail and Bluetooth penetration and usage, all of which are reviewed in detail in the report. Growth in the cellular installed user base, handset shipments and replacement rates were also considered important.

“To illustrate the forecast level of growth for mobile financial services, we are forecasting the number of cellular users to grow by 32% over the next four years; a significant number given the size of the market. By comparison the number of active users of mobile banking and payment services is estimated to grow by 662% over the same timeframe, demonstrating the high growth potential that we see for mobile financial services”, adds Devlin.

This is not to say that making money mobile will not be without barriers. Whilst the technology is there, the biggest concern, particularly in more mature markets, will be security. In these regions, the driver is convenience and mobile services are competing with a number of other means of banking access, such as telephone, Internet and in-person – as opposed to emerging markets where mobile may be the only means of accessing personal financial services. In regions such as Europe and North America awareness and security are much higher on the agenda for consumers and it will take time to educate them and overcome concerns, reassuring them that their mobile phone is a secure access device.

“This will initially affect user behaviour and the type of financial services that they utilise on their mobile phones. In these markets people will have a much greater tendency to test the water with quick, low risk uses, such as checking account balances and topping up pre-paid cards. In the developing markets, where there are fewer alternative means, users will be much quicker to start transferring money and making payments for goods and services in the early days of adoption”, concludes Devlin.