Almost two thirds of Americans now have a cell phone, so when reports come out that cell phone penetration is slowing in the U.S., we can only hope they didn’t spend too much money figuring out what we could have told them for free, if only they’d asked.
Slow growth is better than no growth, so the industry will take it for now, and possibly for a time to come. A new report from the Diffusion Group predicts that a full 75% of Americans will own a handset by the year 2010, and 236 million people will subscribe to a mobile phone solution by then.
The driving force behind the gains is, as always, the variety of things your cell phone can do, and that continues to expand. New and emerging technologies such as EDGE and EV-DO are allowing us to do more with our phones faster, including watch movies and TV, stream audio, see the real internet, receive our e-mail, and control our PCs from afar, and even talk to our pets, all on our phones. The youth market is becoming the main target of phone service providers, as new generations of kids become mature enough to get their first phone. The Diffusion Group report predicts that subscriber segment to double by 2010, to 50 million.
Market researchers track the ratio of subscriber growth to handset sales, and those percentages are diverging sharply. Handset sales remain strong. As new technologies make us look askance at our current clunkers, we long for the cutting-edge technologies built into new phones. Most of us already have our service, though, so the rise in new subscribers is flattening out industry-wide. Looking at individual companies, the numbers vary. Verizon’s subscriber base grew 16% last year, and handset sales, new customers and upgraders combined, grew 8%. For Cingular, the numbers were 6% and 46%.