The Year of the Upgrade
Industry watchers say the U.S. cell phone market is at about 75 percent penetration and 143 millions units had sold by the end of 2006, according to the NPD group. In the old days of consumer electronics, retailers might have looked at those figures and figured the profit parade had already passed by, but modern wisdom suggests that wireless devices are a consumer-captivating category that keeps on coming.
“What’s driving handset demand is now the replacement cycle,” said Anurag Gupta, senior vice president of investor relations for Brightpoint, a wireless distributor that moved 53.5 million devices (globally) last year. “The U.S. is gaining traction and adoption rates are increasing when it comes to new features. We expect double digit growth in 2007.”
American consumers are steadily progressing from downloading ringtones and text messaging to downloading music/video and checking their e-mail on handsets, Gupta said, and they’re ready for faster, feature-rich options to the “free phone” so many of them started with. At the recent CTIA Wireless conference in Orlando, Fla., manufacturers and carriers alike were celebrating this learning curve by offering a new generation of smartphones - a term that may one day be defunct because almost every handset will have Internet connectivity and the ability to operate as an extension of the customer’s PC - as well as selling points for dealers.