The Decline of Voice, WiFi Tablets and Other Carrier Data from 1H 2012

Mobile industry and carrier watcher Chetan Sharma has pulled together mostly carrier-published data for a mid-year update across a range of topics relevant to the wireless industry. I pulled four of his slides below; however you can see the full presentation here.

The first slide below shows increasing smartphone penetration in the US and abroad. No surprise here; this has been in the survey data for months. In Q2 smartphone sales exceeded 70% of new handset sales in the US.

Screen Shot 2012-08-13 at 8.01.50 PM

Outside the US smartphone penetration isn't rising quite as fast. However it will accelerate and US smartphone growth will start to slow over the next 12 to 24 months. Feature phone sales in the US are now clearly in the minority.

The next slide shows handset market share by manufacturer, with feature phone sales representing only about 30% of total handset sales this year.

Screen Shot 2012-08-13 at 8.03.02 PM

Particularly striking in the chart above are the following:

  • The rapid decline of feature phone sales since 2010 (orange)
  • The decline of RIM over the same period (green) 
  • The amazing growth of Samsung (purple), now dominating smartphone and Android sales in the US
  • The relative flatness of Apple's overall share (red)

Screen Shot 2012-08-13 at 8.04.29 PM

The graphic above shows the relative shares of voice and data on US carrier networks. Data, in red, now entirely eclipses voice. In 2009 the two were had nearly equal shares of traffic on carrier networks.

Finally, the following chart shows the ratio of WiFi-only tablets tablet sales with carrier network connections.

Screen Shot 2012-08-13 at 8.03.43 PM

I'm drawing a few inferences but it appears the data show consumers are avoiding additional carrier fees and service plans, preferring to run tablets on WiFi networks. Notwithstanding some of the new shared data plans it appears that carriers will not derive significant new revenues from the growth of tablets.

With nearly 50 million tablets in the US market, carrier-networked devices constitute roughly 8% of the total. The lure of discounted devices in exchange for two-year contract commitments isn't succeeding in getting customers to pay additional carrier fees. Beyond basic consumer resistance to new fees, the $199 Kindle Fire, Nexus 7 and potentially forthcoming 7-inch iPad, undermine the appeal of carrier discounts.