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Demand Up, Profits Down For UK Phone Providers

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The UK likes the new digital Smartphones and also likes the popular iPads and tablets. The statistics are compelling. However, UK mobile phone providers and tablet providers are finding the marketplace is extremely competitive. The mobile phone industry will have increased sales in 2012 but revenue from sales is expected to fall 5.1 percent through 2013.

While revenue will be lightly affected by reduced consumer spending, the real fly in the ointment comes from fierce competition in the industry. Eighty-six percent of UK residents currently own or have use of a mobile telephone. Fifty-two percent of those phones are digital smartphones. Those are impressive numbers. Smartphone sales are expected to increase every year. However, there are 40 different mobile phone providers in the UK. That is a staggering number of providers that is directly responsible for the fierce competition. Yet, the two most dominant of these retailers sells about 50 percent of all new digital phones in the UK.

The UK mobile phone marketplace can best be described as a buyer’s market. The fierce competition has caused the UK’s mobile telephone retailers to reverse estimates and now project flat annualised revenue growth for the next five years through 2018.

The Smartphone phenomenon will not diminish as online businesses like Google seem to release new Smartphone Aps every day. Between Smartphones and iPads, the personal computer may become a thing of the past. Only 12 percent of UK residents own a tablet. Beginning in 2012, the sale of electronic tablets is expected to increase a mind boggling 400 percent in each of the next three years.
Online retailers love the Smartphones. Nineteen percent of UK residents searched for travel arrangements and destinations via their Smartphones. In 2011, only 10 percent of online searches were initiated on Smartphones. In 2012, 16 percent of these searches have been initiated via Smartphones.

Around the globe, eBay projects $8 billion in sales initiated by Smartphones. Last year, eleven percent of sales on the day after Christmas were made via mobile phones. On Mother’s Day, 2012, 50 percent of all Mother’s Day Gifts were transacted via mobile phones.

So, what does all this mean? It means that all residents will soon have digital Smartphones and consumers will use these phones to transact business and plan vacations and manage their affairs. In this buyer’s market, consumers can convert to Smartphones at unbelievably low prices. Mobile phone retailers want your business and they are doing their best to make it hard to say no.

Image source: http://www.fotopedia.com/items/flickr-3313138833

This article was brought to you by STL Communications, specialists in business communication systems.

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