As we went to press in early December 2008, the news about the economy was grim. It had been declared that the world was officially in a global recession, layoffs were taking place across every industry vertical, and predictions for the holiday selling season were dire.
Trying to pinpoint how all of this will impact the realm of the "mobile enterprise" is no mean feat. After all, mobile enterprises exist across all industry verticals, as well as in government, public sector and education. In addition, the scope of technology that comprises a "mobile enterprise" can span the worlds of networking hardware and applications, consumer- and professional-grade wireless handsets, as well as notebooks and other types of computers, accessories such as mobile printers and barcode scanners, and a wide array of software, middleware and applications.
The "mobile enterprise" straddles the worlds of I.T. and telecommunications in most organizations, and both areas are facing growth slowdowns or budget cuts.
IDC, Framingham, MA, predicts that growth in global I.T. spending will slow by half in 2009, effectively stripping some $35 billion worth of revenue out of the market.
Gartner, Stamford, CT, says I.T. spending will increase 2.3% in 2009, but this is a revision of its earlier projections of a 5.8% growth.
Gartner remarks that enterprises view I.T. as a way to transform their businesses and streamline their operating models. Other reasons I.T. will not see more severe reductions include the fact that I.T. is embedded in running all aspects of business, according to Gartner.
Many organizations have shifted to multi-year I.T. programs aligned with business, and these are difficult to cut immediately. In addition, I.T. spending decrease typically lags the economy by at least two quarters, reports Gartner.
On the telecommunications front, Boonton, NJ-based Insight Research predicts that the global telecommunications market will continue expanding over the next five years despite the unsteady economy. This will be driven by growth of wireless services in developing regions that will offset spending slowdowns in advanced economies.
Insight predicts that wireless will be the driver for a compound annual growth rate of 10.3% in enterprise telecommunications services over the next five years. Revenues from telecommunications services will reach $2.7 trillion by 2012, according to Insight. Wireless broadband services are expected to grow at a CAGR of more than 70% in that period, according to Insight.
On the handset side, various reports show 2008 growth rates ranging anywhere from 3.2% to 11%. Maybe not the pace the industry has become accustomed to, but any growth at all would be remarkable in this economy.
IDC reports that global shipments of mobile phone handsets were slower than usual in 3Q 2008. While the 299 million units shipped in the quarter represented a 3.2% increase from the same period in 2007, 3Q is typically a period of ramp-up when manufacturers load their sales channels with product in anticipation of the holiday selling season, according to IDC. Year-over-year 3Q growth rates can run as high as 20% in some years, but this year the ramp-up has been lacking.
ABI Research, Oyster Bay, NY, revised its growth-rate expectations for global mobile handset shipments in 4Q 2008 down to 7.5% from 10.4%; 3Q 2008 delivered 8.2% growth over the same period last year. ABI estimates that the year-on-year annual growth rate will be 10.5% - 11%, to close out 2008 at around 1.27 billion units.
Smartphones are a bright spot, according to IDC, driven by the iPhone and other new devices. In fact, the researcher reports that in North America, new releases from Apple, Palm, and Research In Motion, along with the highly anticipated release of the HTC G1, pushed smartphones further into the public eye and into users' hands, at the expense of traditional mobile phones, which showed a slight decline from a year ago. Even so, overall growth in North America remained sound heading into 4Q 2008, according to IDC.
Yet, even smartphone growth has been slower than in recent years, according to Gartner. In 3Q 2008, 36.5 million smartphones were sold, an 11.5% increase from the same period in 2007. While Gartner predicts that smartphone growth will continue, it will be at a slower pace.
On a regional level, Gartner finds North America was the fastest growing market for smartphones, with a 68% increase in the 3Q 2008. RIM and Apple did particularly well in the region; together, they accounted for more than 70% of the smartphone market in 3Q 2008. Apple regained second position behind RIM with 25.4% market share.
Touch-screen phones remain a fraction of the overall mobile phone market, but sales have been soaring. In the 12 months through September, sales of the phones in North America grew 130%, in contrast to 4% growth in the overall phone market, according to Reston, VA-based comScore M:Metrics.
As of September 2008, more than 2.6 million people in North America had some model of the iPhone, according to comScore M:Metrics. The second-most-popular touchscreen model was the LG Voyager, which was available through Verizon Wireless and had 851,000 users.
Making The Business Case
Ultimately, it's the positive impact on a company's bottom line that is going to make the case for mobility in a tough economy. "I learned a very interesting lesson in the recession of the 1970s," says industry consultant Andrew Seybold of Andrew M. Seybold, Inc. "I was working for Motorola and doing government sales. We had a business sales unit in the same building. They were complaining that the recession was going to kill their business. And it didn't. In fact, their sales went up. And their sales went up because they started telling people, 'You can take a truck off the street if you add radios to the rest of your trucks because you can be more efficient, and you can get more done.'
"I think that's the same thing now. In this economic situation, if you make an investment in wireless, it's going to pay in the fact that you can manage your business and get more done faster. In fact, planning and expansion makes a lot of sense right now. The field service department found that it can provide several more service calls per day. That's money in the pocket right now. And then, of course, you can provide a spreadsheet that keeps showing the ROI."