Why the easy life's over for mobile

There was a great moment on the silicon.com newsdesk today. The last member of the editorial team without a mobile phone changed his ways - after years of resistance - and became the proud owner of a somewhat less-than-cutting-edge Ericsson handset. He hasn't stopped using it since.

We may smile at such a state of affairs but they highlight a serious problem, at least for operators and handset makers. The number of people in the UK, and, in fact, most of Europe and developed Asia, without a mobile phone is small. Allowing for children too young to use a device and those too old or infirm, there isn't much of a market left.

Figures out from Gartner Dataquest today show, the worldwide market for mobile phones was growing at 60 per cent per year between 1996 and 2000. In 2001, it fell 3.2 per cent.

Nokia, the mobile phone market leader, has remained strong, claiming over a third of the total market, even allowing for some complicated ways of measuring it (see http://www.silicon.com/a50717).

However, other handset and infrastructure companies have had no option but to outsource to cut costs or collaborate on design and marketing. Witness tie-ups between NEC and Siemens, Alcatel and Fujitsu or - most famously - Ericsson and Sony.

The latest stat may provoke the odd hushed gasp but operators already know the easy days of low-hanging fruit are over.

Vodafone, for example, has for many months based its figures on data that reflects value per subscriber, not mere numbers. Indeed, that horrible old expression, ARPU (average revenue per user), is all important.

Finding ways to squeeze more out of existing and valuable customers is what the business is all about, as we'll see increasingly with mobile data services, multimedia applications, games and telematics-based services.

For all the bells and whistles promise of the 3G era, the mobile industry's golden age may have passed. There aren't many more people left like our friend in editorial.