Shipments of mobile communications devices continue to grow dramatically with another boom year ahead, according to research analysts.
The devices' popularity outstrips demand for other electronic equipment such as desktop and portable computers, printers and copiers.
Custom processors and contract manufacturers mold the housings using thin-wall and electronic-shielding techniques and copious quantities of ABS, polycarbonate and other polymers.
Suppliers run to keep up with major players Nokia Oyj, Motorola Corp., Telefon AB LM Ericsson and others. Emerging devices may result in more users of mobile Internet devices than fixed ones.
Yankee Group Research Inc. of Boston forecasts the worldwide market for mobile communication devices will increase 23.4 percent to 771 million units in 2001 from 625 million last year.
The more mature United States-Canada portion of the global market is expected to grow 16.5 percent to 134 million units in 2001 from 115 million last year, according to Adam Zawel, senior analyst with the wireless group. Yankee Group is a unit of Reuters Group plc.
Longer term, Zawel forecasts global 2005 shipments at 1.26 billion units, including 195 million in the U.S. and Canadian markets.
In Yankee Group reports, the devices include wireless phones, those with embedded browsers and models offering a small message service.
Now, about 15 million mobile phones in the United States can perform as Internet browsers. More than half of those sold in 2001 will have that capability and by 2003, "all new wireless phones will be Internet-enabled," he said.
Zawel foresees convergence of telephone and personal-digital-assistant capabilities.
"It is already happening with some larger-screen phones" that employ personal identification numbers for security, he said.
"We think there is room for multiple devices. Each individual user might be willing to lug around more than one device — a small phone and PDA — connectable by Bluetooth" technology. Bluetooth allows devices within 30 feet of each other to communicate without wires. Vendors promote the concept, but a current absence of industrywide standards may hinder early usage.
"Bluetooth is going to change a number of business models," Zawel said.
Pressures to lower costs will continue, according to Dataquest Inc., an information technology research and consulting firm headquartered in San Jose, Calif.
"Some players are looking for new, niche products to take down cost barriers to entry," said Bryan Prohm, senior analyst in Raleigh, N.C., with Dataquest's mobile communications group.
"We've talked to companies with a sub-$30 handset, essentially a disposable device," said Prohm.
Some devices may get larger.
"We have reached a point of diminishing returns on device utility because of their small sizes," he said, adding that future generations of feature-laden phones will have to be larger.
While he anticipates a greater segmentation of products, Prohm thinks there will "always be a market for the small phone."
Dataquest projects 25.6 percent growth in global shipments of mobile communications devices to 526.1 million in 2001, from 418.7 million last year. Shipments are to reach 744.1 million in 2004.
Shipments in the United States will jump 36.4 percent this year to 97.8 million devices, from 71.6 million in 2000.
Worldwide, Internet devices will increase from last year's 68.1 million, representing 16.2 percent of annual shipments, to 689 million, representing 92.6 percent of 2004 sales, according to Dataquest, a unit of Gartner Group Inc.
Desktop computers continue as a mainstay but with growth slowing gradually.
International Data Corp. of Framingham, Mass., projects worldwide shipments of 120.8 million desktop computers in 2001 vs. 104.6 million last year. That's 15.4 percent growth, which is less than the previous year.
"In general, the U.S. and Western Europe have been the largest markets, but both are reaching a saturation point on the installed base," said Anne Bui, a research analyst in Mountain View, Calif., for IDC.
IDC projects 2001 desktop shipments will increase 20.1 percent in the Asia-Pacific region, 17.6 percent in Japan, 14.4 percent in the United States and 12.7 percent in Western Europe.
In the consumer segment, macroeconomic factors and fewer replacement needs are slowing demand, she said: "Consumers are diverting spending dollars to other electronic items."
Corporations still favor desktop computers for networking and platform stability, but IDC among others is moving toward the use of laptops.
"We need to be mobile," Bui said.
Analysts for Dataquest of San Jose agree that desktop growth is slowing.
Dataquest projects worldwide shipments of 126.7 million desktop computers in 2001, vs. 110.0 million last year, for a 15.3 percent increase.
The U.S. shipments will grow 15.1 percent to 47 million this year vs. 40.8 million in 2000, according to Dataquest.
Dataquest analysts anticipate that strong demand for notebook and ultraportable computers will continue at least through 2001's first half.
Large and midsize businesses are moving to higher-performance notebooks and, in some cases, catching up on purchases that they deferred a year ago because of Y2K concerns, according to a Dataquest report.
Many universities are wiring dormitory rooms and classrooms with Internet connections and moving toward wireless local area networks. More students, home businesses and small offices are choosing mobile computers.
Dataquest projects 19.4 percent global growth of mobile computer shipments, to 29.8 million this year from 25 million in 2000.
The U.S. shipments of portable computers are projected to increase 14.7 percent, to 10 million in 2001 from 8.8 million last year, according to Dataquest.
Worldwide shipments of 118 million printers are expected in 2004.
"We estimate that more than 82 percent of shipments will be inkjet printers," said Peter Grant, principal analyst with Dataquest's digital document image group.
More than 68 million units were shipped worldwide in 1999 including inkjet, laser, dot-matrix and some thermal printers.
Dataquest forecasts the domestic market for computer printers will grow 12.8 percent in 2001 to 30.7 million units, from about 27.2 million last year.
Domestic shipment of plain-paper copiers is static in number of units but is shifting dramatically from analog copies to digital technology, said IDC analyst Keith Kmetz.
Competing with analog machines, digital technology existed on 47 percent of 1999 copiers and moved up to 69 percent in 2000. The forecast for this year's digital role is 85 percent.
Typically, analog copiers are stand-alone units, while digital units can be connected into a company's computer network as a multifunctional peripheral, Kmetz said.
"The market transition to digital will be virtually complete by 2004," he said.
Manufacturers configure more than half of all digital copiers as multifunctional peripherals.
"This percentage should continue to grow steadily," Kmetz said.
IDC said the domestic market should consume 2.03 million copiers during 2001 vs. 1.97 million last year.
Dataquest forecasts the domestic market for copiers will grow a modest 3 percent, to 2.2 million units in the current year from about 2.1 million in 2000.
Dataquest analyst Lynn Ritter sees digital technology as the principal driver in this market.
"Copiers were 49 percent digital in 1999, and we expect this figure to rise to 99 percent by 2004," she said by e-mail.