Sep 28, 2007 (07:09 AM EDT)
Mobile Phone Memory Cards Expected To Generate More Revenue Than Headsets

Read the Original Article at InformationWeek

After dominating the mobile-phone accessory category for years, headsets are about to be knocked off their pedestal by the growing boom in memory cards, according to a report from ABI Research.

The market research firm predicted shipments of removable memory cards for handsets should pass the $7 billion mark this year, compared with $5 billion expected for headset shipments. ABI said it expects the mobile phone accessory market to generate more than $80 million in revenue in 2012.

ABI said memory cards would continue as the highest revenue-generating mobile-phone accessory over the next five years.

There's no real drop in headset manufacturing, however, as they're increasingly being included in purchases for handsets. Memory cards are usually a separate accessory purchase.

"Now even Bluetooth headsets are being presented in-box with the handsets," said ABI analyst Shailendra Pandey, in a report this week on the mobile-phone accessory market. "Greater aftermarket sales of memory cards versus increasing in-box sales for headsets are resulting in stronger growth and higher revenue from memory cards when compared with headsets."

Pandey pointed out that growing support for the Universal Flash Storage specification for use in mobile phones and other consumer electronics devices is likely to spur rapid growth of the memory card market in the future. The specification, expected to be finalized in 2009, will likely reduce or eliminate the need for adaptors for different memory card formats.

ABI also expects the market for in-box memory cards to grow as handset vendors competing for market share in the high-end smartphone category realize that consumers will want the cards to benefit fully from the multimedia features in those handsets.

In another recent report, ABI noted that ultra-low-cost handsets will drive the overall handset market, as 80% of new mobile phone subscribers are expected to come from emerging markets. The market research firm said, however, that many handset manufacturers will be challenged to meet the pricepoints of the low-end market.