Smartphones and data-capable devices are likely to be a major focus at this week's CTIA Wireless trade show in Las Vegas, but analysts are pointing to predictions of weak postpaid subscriber growth in the first quarter as a sign that carriers cannot count on smartphone growth alone.
There is usually a seasonal dropoff of 5 percent to 10 percent in subscriber growth from the fourth quarter to the first quarter, with holiday handset sales fading away. However, some analysts predict a larger drop this quarter. "You can wave your arms about data all you like, but the reality is that the revenue growth for the U.S. wireless industry was only 2.6 percent by the end of 2009," Sanford C. Bernstein analyst Craig Moffett told Reuters. Moffett predicts an industrywide 10 percent sequential dropoff in postpaid subscribers. Pacific Crest analyst Steve Clement told Reuters that he is predicting a 10 percent to 15 percent drop.
The main argument behind the forecasts is market exhaustion following massive promotional efforts behind the Verizon Wireless Motorola Droid and the AT&T Mobility Apple iPhone.
Another factor may also be the strength of the fourth quarter. AT&T and Verizon accounted for more than 80 percent of the total net wireless subscriber additions in the fourth quarter, according to a recent report from Wireless Intelligence. That total number was around 5.9 million, which, according to the research firm, was the highest number of net adds in any three-month period in three years. Thus, growth may slow simply because there are fewer subscribers left to acquire.
- see this Reuters article
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