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US Cell Phone Industry Analysis


The following report details cell phone industry analysis, which deals with cell phone manufacturers as well as cell phone services.  This analysis includes the dominant economic characteristics, Six Forces of Competition (Porter’s Five Forces of Competition), driving forces of the cell phone industry, strategic mapping of company strengths, the ease entry and exit into the cell phone industry, and the overall industry outlook.

Dominant Economic Indicators

  1. Market Size:

The cell phone industry is one of the fastest growths besides the Internet.  Cell phones have gone through a huge change and its market has expanded globally.  Since 1994, the cell phone industry has increased from 24 million to about 182 million in wireless phone and related devices operating in the United States with some 162-million mobile-phone users in the United States alone.

The cell phone market is increasing very fast with today’s ever-emerging technology and innovation in improving cell phones.  Today, society is living with advance technology and everyone wants to keep pace with the new technologies.  Cell phone industry is growing larger because it has become a necessity.  Parents are getting mobile phones for their teens because they want to communicate in case of an emergency and the wireless carriers have made it easy to add users to their existing plans.  And carriers are becoming successful in getting parents to expand their plans to include their teens.  This increases buyers and increases market size worldwide.

  1. Scope of Competitive Rivalry:

The cell phone industry has become increasingly larger within the last three years as a result of more affordable cellular phones as well as lower service costs.  Companies are competing in an advance technology and communication sector in which success attracts customers to buy their products and services.  The market is very competitive because they offer the same products and services, but has different physical attributes to the phones and different costs, which buyers have choices to choose from.  Companies want to provide the best products and services to attract buyers by lowering cost and improving products, which makes the cell phone industry very competitive.

Here are the main factors of competitive rivalry:

  • Cell phone cost: Customers wants better services and products at a lower cost.
  • Bundle functions into just one cell phone: For example E-mail, text messaging, internet
  • New technology improvement: For example camera phones
  • Better landline services
  1. Stage in Life Cycle:

The cell phone industry is in the Mature Life Cycle Stage, where nearly all-potential customers are already users of the industry’s product.  The cell phone industry’s growth and profitability depends entirely on its ability to attract new customers. By increasing and improving the cell phones and services, it will attract more potential buyers, because technology alone will not attract buyers, instead companies want value-added services for mobile-phone securities.

Cell Phone companies attract buyers in two ways during the Mature Life Cycle State:

  • Service: Making cell phone more affordable will attract buyers to buy more cell phones and increase competition between companies to lower service fee.
  • Innovative Phone Style: The new designs and improvement in the physical appearance of the cell phones, and more add-on features attracts customers to buy it at a higher rate.

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