Mobile operators will make approximately $10.7 billion worldwide through the sales of private branded handsets in 2007, almost 23% more than the $8.7 billion earned in 2006.

LONDON-- A number of factors including handset delivery delays, greater customization needs, increasing demand for low cost handsets, and the growing importance of emerging markets are prompting operators to choose private branded handsets.

According to ABI Research industry analyst Shailendra Pandey, “In the past, private branded handsets have mostly been high-end feature phones and smartphones supplied to operators by the likes of HTC, Sharp, and Quanta. Now, however, the growing demand for low-cost and ultra-low-cost handsets means that operators also have opportunities to provide private branded handsets in this segment. They can partner with selected local manufacturers who will be able to address the low-cost market by avoiding import costs and benefiting from the skill sets and cheap labor of indigenous work forces.”

Therefore, in addition to having handsets from leading vendors such as Nokia and Motorola in their portfolios, operators are looking for opportunities to forge partnerships with these local manufacturers, who are also more willing to accept operators’ customization and branding needs. One example is Vodafone’s well known agreement with Huawei to supply 3G handsets for its operations in 20 global markets, and the more recently announced partnership with ZTE for 2G handsets.

In the next five years, over 80% of new mobile phone subscribers will be from the emerging markets of Asia, Africa, and Latin America. Asia is now the most important region for demand, supply, and competition in the handset industry, and Asian suppliers have significant cost advantages over suppliers from other regions.

ABI Research expects the market for operator private branded handsets to grow to over 127 million handset shipments by 2011. The firm’s recent study, "Operator-Branded Handsets" (http://www.abiresearch.com/products/market_research/Operator-Branded_ Handsets) examines the market landscape and future potential for operator branded handsets. It discusses the driving forces, the competitive business environment, and the handset vendors, original design manufacturers, mobile operators and MVNOs involved in this market.

This study forms part of two ABI Research services: Mobile Operators (http://www.abiresearch.com/products/service/Mobile_Operators_Research _Service), and Mobile Devices (http://www.abiresearch.com/products/service/Mobile_Devices_Research_S ervice), which include a variety of Research Reports, Research Briefs, Market Data, Online Databases, ABI Insights and analyst inquiry support.

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