Smartphone market saturation slows global growth | Smartphone market saturation slows global growth -
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Smartphone market saturation slows global growth

: Wednesday, October 30 - 2013 @ 09:25

Developing nations still use 2G as dominant mobile platform

Nearly half the world’s population owns at least one mobile phone and as of 2010, more than 90 per cent had access to a mobile phone network, according to a new Vital Signs Online Trend released by the Worldwatch Institute.

Despite more than 3.4 billion cell phone owners, the number of mobile subscriptions is far greater – that is the number of active accounts that have access to a mobile network. This figure grew from one billion subscriptions in 2000 to a projected figure of more than 6.8 billion by the end of 2013. This is higher than the number of people owning cell phones, because many have multiple devices or use multiple SIM cards in one phone. As a result, the number of mobile subscriptions is expected to surpass the world’s population in early 2014, according to the International Telecommunication Union, an agency that is part of the United Nations.

The annual rate of growth is beginning to slow, however, as markets become increasingly saturated. Annual additions to mobile subscriptions peaked in 2010 at 680 million. The subscription rate began to dip in 2011 and an estimated 424 million new subscriptions will be added in 2013 – some 250 million fewer than in 2010.

The developing world is home to more than four billion active mobile phone subscriptions, which is more than mature economies. This is not surprising, given the distribution of the world’s population. On a per capita basis, however, the picture is very different. On average, industrial countries have 128 subscriptions per 100 people, compared with 89 per 100 individuals in developing countries. The latter’s figure is expected to reach 100 subscriptions per 100 people in 2014.

The future of the mobile phone industry will be less about adding new subscriptions and more about improving existing service. The most common mobile network in the world still uses 2G (second generation) technology, which allows users to talk and send text messages. Today, 2G accounts for nearly 4.7 billion mobile subscriptions.

In developing nations, 2G is the dominant mobile platform, because it is inexpensive to install, costing less than fixed-line networks for wired phones. The ability to establish 2G networks on difficult terrain without pre-existing infrastructure has led to ‘leapfrogging’, in which many users skip landline technology altogether in favour of mobile phones.

Perhaps one of the most important side effects of the growing mobile phone industry in the developing world is that financial services have become tethered to mobile phone use in poor regions. Areas with high poverty tend to have mobile subscription rates of 50 out of 100 people, while only 37 percent of people living there have access to a physical bank branch. Financial institutions have, thus, started to leverage existing infrastructure for mobile phones, so that a host of transactions, such as opening a savings account, paying bills or transferring money, can be conducted at local mobile retail stores.

 Smartphone activism

One of the most dramatic uses of mobile phones was during the Arab Spring protests in 2010. One Egyptian activist explains: “[We] used Facebook to schedule the protests, Twitter to co-ordinate and YouTube to tell the world.” The Dubai School of Government found that nine out of ten Egyptian and Tunisian protestors used Facebook to organise and popularise their protests.  Although most social media sites, such as Facebook, are available via computer, Egyptians own mobile phones more than computers and they were preferred during street protests, as they could be carried anywhere and easily concealed.

Although mobile phones open up new avenues in economics and politics, their production and disposal often comes at a very high human cost. Factories in countries, such as China, get contracts from electronics and phone companies to produce the devices as cheaply as possible. As a result, they cut corners in ways that can have severe impacts on workers’ health and entail other severe labour abuses.

Mobile phones also create certain health and environmental problems when they are thrown away or recycled improperly. People in the US replace their mobile phones once every two years on average. In 2010, more than 150 million phones were thrown away or recycled in the country alone.

Old phones, along with other so-called e-waste, are often exported to countries, such as India and China, where valuable materials contained in them are extracted in ways that endanger the health of workers and that pollute the local environment with dangerous substances. Exposure to the phones’ components can have severe neurological effects, especially on the children who are most often the ones involved in such extraction processes.

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Wednesday, October 30- 2013 @ 9:25 UAE local time (GMT+4) Replication or redistribution in whole or in part is expressly prohibited without the prior written consent of Mediaquest FZ LLC.

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