IntegrationWireless

Wireless Market Analysis

IntegrationWireless

Confidential

TABLE OF CONTENTS
TABLE OF CONTENTS..........................................................................................................................2
WIRELESS INDUSTRY OVERVIEW....................................................................................................3
Wireless Subscription Growth...................................................................................................3
Wireless User Profile.................................................................................................................4
Interest In Wireless Data Services.............................................................................................4
Wireless Web Access................................................................................................................5
Mobile E-Business.....................................................................................................................5

IntegrationWireless 2623 Connecticut Avenue, NW No. 1 Washington, DC 20008

IntegrationWireless

Confidential

WIRELESS INDUSTRY OVERVIEW

Wireless Subscription Growth
The wireless industry has undergone phenomenal growth over the past ten years. According to the
Cellular Telecommunications Industry Association, there were over 86.1 million wireless subscribers
in the United States as of December 31, 1999. This figure is equivalent to over 31 percent of the US
population using wireless phones.1
As of May 31, 2000, there were over 93,057,254 US wireless subscribers, with an estimated 45,924
new wireless subscribers every day one every two seconds. In addition, the number of digital
subscribers soared to more than 38.5 million in mid-year 1999, amounting to 47 percent of all wireless
subscribers (digital plus analog) in the US.2
WIRELESS SUBSCRIBERS: DEC.1985 - 1999
Millions
90

SUBSCRIBERS

80
70
60
50
40
30
20
10
0

1985

1987

1989

1991

1993

1995

1997

1999

YEAR
Source: CTIA3

A worldwide estimate, from Cahners In-Stat Group, predicts that there will be over 1 billion wireless
subscribers by the third quarter of 2002, with a global penetration rate of nearly 17 percent.
Subscribers should increase to approximately 1.87 billion by the fourth quarter of 2004.4

IntegrationWireless 2623 Connecticut Avenue, NW No. 1 Washington, DC 20008

IntegrationWireless

Confidential

Wireless User Profile

WIRELESS PHONES - LENGTH OF USE

6+ Years
17%

Not Sure
1%

<6 Mos.
10%

6 - 11 Mos.
8%

1 - 2 Years
26%

3 - 5 Years
38%

Source: Peter D. Hart Research Associates5

To typify the characteristics of long-term and short-term wireless users, a composite profile has been
constructed for each group using data collected by Peter D. Hart Research Associates6.
New Users

Longtime Users

Personal users
Age 18 34 (especially women)
Income under $50K
Some college / less

Business users
Age 35 59 (especially men)
Income over $75K
College graduates
Men

Interest In Wireless Data Services

Overall, 25 percent of wireless users indicate that they have a great deal (13%) or quite a bit (12%) of
interest in wireless data services including Internet access, e-mail, on-line shopping, and text
messaging. Approximately 30 percent have just some interest and 44 percent said they have no
interest at all right now. However, as witnessed by the rapid acceptance of personal computers and the
Internet, the level of interest and rate of penetration for wireless web access can increase dramatically
once users comprehend the utility of such services.
Interest in wireless data services is notably higher among selected groups, such as wireless phone users
between the ages of 18-34. About 42 percent from this age bracket say they have a great deal or quite
IntegrationWireless 2623 Connecticut Avenue, NW No. 1 Washington, DC 20008

IntegrationWireless

Confidential

a bit of interest in wireless phones with data services. In line with that observation is another estimate
that 40 percent of likely upgraders are interested in data services via their mobile devices. 7 In fact,
digital wireless phones are expected to enjoy a 68 percent market share in the US this year.8
LEVEL OF INTEREST - WIRELESS DATA SERVICES

Not Sure
1%

Very Little Interest

44%

Great Deal of Interest

13%
Quite a Bit of Interest
12%

Just Som e Interest

30%

Source: Peter D. Hart Research Associates9

Wireless Web Access

"IDC [International Data Corporation] predicts that by mid-2001, all digital cellular/PCS [Personal
Communications Services] handsets shipped in the world will be WAP-capable," said Iain Gillott, vice
president, Worldwide Consumer and Small Business Telecommunications research at IDC. "So, it's
very realistic that the majority of Internet access will shift so that it is through wireless and not wired
means."
"Once there are more wireless Internet users than wired users, Webmasters may first consider the
needs of the wireless users and secondly, the wired PC users," Gillott said. "Today, Internet sites have
to be retro-fitted for wireless users, but three years from now, it is conceivable they might have to be
redesigned for wired users."10
Mobile E-Business
According to Strategy Analytics, the global mobile commerce market will be worth $200 billion by
2004.11 Analysts at Ovum, a research and consulting group in Boston, seem to agree with that
assessment by predicting large revenues in the mobile e-commerce area even though consumer demand
is currently low. Ovum analysts expect worldwide mobile e-commerce spending for business and
consumers to be about $3.5 billion in the year 2000, $15.1 billion in 2001, $37.8 billion in 2002, $82.5
billion in 2003, $140.2 billion in 2004 and $210.7 billion in 2005.12

IntegrationWireless 2623 Connecticut Avenue, NW No. 1 Washington, DC 20008

IntegrationWireless

Confidential

PROJECTED MOBILE E-COMMERCE SPENDING

Billions
210.78

250
SPENDING

200

140.25

150

82.58

100
50
0

3.55

2000

15.16

2001

37.87

2002

2003

2004

2005

YEAR

Consumer Spending
Wireless Today

Business Spending

12

With the wireless industry growing at a pace surpassed only by the Internet, companies associated with
this sector will surely benefit. As companies make more advanced data services available to
subscribers, the affordability and versatility of wireless phones will undoubtedly create a win-win
situation for both wireless carriers and consumers.13

IntegrationWireless 2623 Connecticut Avenue, NW No. 1 Washington, DC 20008

CTIA General Wireless FAQ: http://www.wow-com.com/consumer/faqs/faq_general.cfm#one

CTIA General Wireless FAQ: http://www.wow-com.com/consumer/faqs/faq_general.cfm#one
3
CTIA Semi-Annual Wireless Industry Survey: http://www.wow-com.com/statsurv/survey/199912c.cfm
4
Cahners In-Stat Group: http://www.wirelesstoday.com/snap/current.htm
5
Peter D. Hart Research Associates: http://www.wow-com.com/statsurv/survey/hart/hart2000.pdf
6
Peter D. Hart Research Associates: http://www.wow-com.com/statsurv/survey/hart/hart2000.pdf
7
Peter D. Hart Research Associates: http://www.wow-com.com/statsurv/survey/hart/hart2000.pdf
8
Cahners In-Stat Group: http://www.wirelesstoday.com/snap/current.htm
9
Peter D. Hart Research Associates: http://www.wow-com.com/statsurv/survey/hart/hart2000.pdf
10
Advisor.com - April 26, 2000: http://www.advisor.com/Articles.nsf/ID/OA000426.OLSEE095
11
Strategy Analytics: Wireless Data and Computing Service - Declan Lonergan. Date Published: 12/99.
12
Wireless Today: http://www.wirelesstoday.com/snaparchives/snap041000.html
13
Standard & Poors Industry Surveys Telecommunications: Wireless: Dec. 30, 1999
1
2