The Mobile Handset Market Isn't Shrinking... It's Evolving

Mike Masnick of TheFeature believes that, counter to reports that the market for handset devices is reaching saturation and declining, the market is actually increasing. The difference, he believes, is in profit -- that is, the growth is in cheaper units and in upselling to those looking to replace or upgrade what they already have. Masnick compares the handheld device market to the PC market, which continues to grow as the cost of PCs falls... and believes that this is good news for innovators in this space.

The market for handsets isn't "declining," it's just going through it's expected phases of growth. If the average price of handsets didn't decline over the next five years, that would be much more worrisome, as it would be a sign that something seriously problematic had happened in the market. For companies in the space, however, it's important to view this as an opportunity. First, as an opportunity to reach new markets that previously could not afford to take part in mobile connectivity. Second, and more importantly, it's an opportunity to come up with new and innovative uses that take advantage of just how inexpensive the equipment is becoming. That even means going beyond the concept of the "handset" to recognizing that a cheap device with connectivity can be useful for many different things, from gaming devices to security cameras to completely new concepts we haven't even thought about yet. The only thing that's really in decline are the barriers to new opportunities for the market.

A related article in TheFeature is an interview with John Poisson of the Fours Initiative, who believes that we've only begun to scratch the surface of the potential for camera phones and MMS. The industry still has technical and business hurdles to overcome, but once they're resolved, Poisson believes that picture sharing through camera phones could revolutionize the way we understand both photography and digital content.