New mobile market update comes with a few surprises

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U.S. mobile carriers must feel like the kid who has to eat alone at the lunch table. According to a recent mobile market update released by technology and strategy consultant Chetan Sharma, they added only 139,000 new connections in the second quarter of this year, a 95 percent drop from this time last year and the lowest net-add in U.S. mobile history. Other interesting data points:

  • T-Mobile led the pack in new connections, something that last occurred during the Bush administration.
  • AT&T (NYSE: T) sold more iPhones than other carriers, but Verizon (NYSE: VZ) sold the most smartphones overall.
  • Smartphones accounted for nearly 87 percent of all devices sold in Q2.
  • Not surprisingly, the iPhone was the biggest-selling smartphone.
  • 60 percent of mobile devices in the U.S. are smartphones, but...
  • That 60 percent is concentrated in only 35 percent of households.

Sharma notes, "the potential market for smartphones at this point in time is 148M subs who don't have a smartphone ..." Add to that the upgrade cycle. which averages between 18-20 months in the U.S., and the market for smartphone growth remains pretty healthy.

"The global market is even more fertile. The emerging markets are quite price sensitive and the low-cost Android devices are rushing to fill the void. If Apple cares about market share, it will have to figure out a strategy to address the void in its portfolio," Sharma noted.

Sharma says market activity for the remainder of the year will be fascinating to watch. He anticipates a shift away from voice services toward a focus on mobile apps. Sharma also predicts the potential for one or more mergers between providers. Though he acknowledges that "Google and Apple are ahead of the pack," Sharma cautions against discounting any of the teams on this very busy playing field.

For more:
- see the update site

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