June 19, 2001 10:10 AM PDT

Wireless industry grows despite downturn

The wireless industry continues to grow, despite the economic slowdown and recent staff cuts at leading mobile phone manufacturers, according to a new survey.

Although growth is expected in most areas of the wireless industry, the upward curve is not expected to reach the grand predictions made by many in 2000, a study by Allied Business Intelligence found.

The market for wireless narrowband, or slower-speed Net access, continues to evolve as carriers move to larger networks, upgrading infrastructure from 1999 to 2006. Overall, there will be more than 1.7 billion wireless subscribers by the end of 2006, with about 500 million of those using wireless Internet access, the survey found.

The growth of the wireless market will also drive the development of new cellular technology, which in turn will create a larger market for Bluetooth connectivity, allowing wireless handheld devices, personal computers and laptops to work together, according to the study.

Bluetooth is a wireless networking technology that allows devices in a 30-foot range to transmit data between one another. The technology is designed for mobile devices such as cell phones, PDAs and mobile computers.

Bluetooth shipments are expected to rise from fewer than 1 million in 2001 to 1.6 billion in 2006.

The survey comes just one week after cellular equipment giant Nokia warned second-quarter earnings will plummet below estimates and that it expects to adjust its outlook for the remainder of the year.

The troubled economy has also hampered rival Ericsson's growth. The cell-phone maker lowered its own estimate of wireless phone sales. The company had predicted global cell phone sales in 2001 would be between 450 million and 525 million, but it later cut that forecast to between 430 million and 480 million.

But research firms continue to forecast growth across the sector, despite company forecasts. According to a recent Gartner report, a half-billion cell phones will be sold worldwide regardless of the slowdown that has hurt many players.

 

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