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Prediction: Cell-Phone Growth Rates Will Peak In 2007-2008

Prediction:  Cell-Phone Growth Rates Will Peak In 2007-2008


Everyone said there was no way to predict the big .com bust, but
I say they are wrong, and to prove it, I am predicting shakeouts
in the cell-phone industry that will remind people of .com busts
and that they will start coming around the end of 2007-2008.

Here's why.

As of the end of 2006 there are about 2.5 billion cell-phones on
active accounts in the world.

Somewhere on the order of another half a billion are going to be
added in 2007, and again in 2008, for a total of 3.5 billion.

Guess what?

3.5 billion people is more than half of the people in the world.

So what?

It means that, just like in the .com bust, that growth rates are
simply not going to be able to continue. . .how can you double a
number that is already over half of the potential market???

This is what no one paid attention to in the .com bust, even the
friends I mentioned it to, and some of them literally lost money
in the realms of 10 figures because they didn't realize a market
that had passed 50% couldn't double again!!!

It doesn't take a genius to figure this out, once the problem is
placed before them, but somehow it does seem to take a genius of
sorts to point out the context that brings it out.

Sometime in the next year or two the cell-phone market is likely
to pass 50% of the potential market, and the idea of making some
new cell-phones at the rate of a billion per year is going to be
looking a bit different than it does now.

What will happen?

The larger companies will continue to roll out Rolls-Royce phone
sets that do more and more, until they have terabyte drives as I
mentioned in the previous article, along with more and more of a
"video-phone" system that will compete with the Video iPod and a
host of other products until your cell-phone is multi-functional
to the point where anyone using only TWO of the DOZEN functions,
or more, will find it cheaper to buy these cell-phones than from
the perspective of buying a separate piece of hardware for every
function they want to have.

  1.  Cell-Phone
  2.  Digital Still Camera
  3.  Digital Movie Camera
  4.  Digital Voice Recorder
  5.  Alarm Clock
  6.  Digital Radio
  7.  Digital Television
  8.  Digital Video Player
  9.  Global Positioning System
10.  Emailer
11.  Web Browser
12.  Instant Message System
13.  Pager

Obviously the smaller companies will fall out sooner unless they
can figure out a way to provide simple basic services, perhaps a
service even based on used cell-phones, though I am sure makers,
and lawyers, in the larger companies will try like hell to do an
opposing law to this strategy.

After all, shouldn't it be illegal for anyone but Verizon to set
up a Verizon cell-phone for service?

After, all, isn't it illegal for anyone but Sony, to set up Sony
televisions, Sony radios, Sony stereos, Sony digital cameras???

No!!!

Of course not!!!

Just as Ma Bell lost its monopoly on setting up telephones, Sony
and Verizon will not be able to have a similar monopoly on their
cell-phones, much as that will irritate the hell out of them.

Countries will realize that cell-phones piled in the garbage are
not a good thing, and will insist on recycling them, other than,
and only in rare cases, when the countries bases on arbitrarily,
and intentional, "planned obsolescence" will help corporations a
bit more in their efforts to make sure you can't "own" products,
you can only "license" their use.

Yes, there will be another big flap about who owns cell-phones.

Of course, any enlightened country will rule that if such phones
are owned by the companies, then they are responsible for them--
meaning the phones can be dropped off for recycling at companies
who sell them, and they are responsible from then on.

The conclusion to be drawn here is that the cell-phone industry,
such as it is, will have to change from a "growth industry" to a
"mature industry" along with all the other changes entailed in a
change of that magnitude.

Some will make it.

Some won't.

Some will play dirty.


Michael S. Hart
Founder of Project Gutenberg
Inventor of eBook Libraries