Our Market

We estimate the total value of software in mobile phones in 2007 to be $8 billion worldwide. This includes both development and integration of software. A major part of this value is created and captured by the phone manufacturers themselves. A further large portion of the business goes to platform vendors. Today, we estimate that approximately 15% of the value goes to services and solutions providers such as Teleca. Out of those 15% Teleca has a 15% market share which makes us the largest independent services and software provider in this space. During 2007, we saw several new trends on the market that we will address in our strategy:

• Phone manufacturers are expanding business to services, Internet companies are extending to mobile products and platforms.
• Continuous price pressure, but also increasing difference in valuation of services: A need for a flexible combination of high-value and low-cost services.
• Increasing use of Open Source Software as a building block, both in application software (such as Browsers) and in platforms (such as Android™).

Figure: Our market today*. Total $8 Billion (2007). Teleca market share ~15% of independent software companies, ~2% of total software R&D. * According to company estimates.

The competition

We see two types of main competitors: firstly, there are large companies with wide services portfolio mainly based in India (in addition to mobile devices) and strong focus on off-shore. Second, there are the local or regional services companies with only a limited amount of off-shore capability. Teleca is unique in combining the on-shore/on-site operations with a strong off-shore scale. Depending on the particular customer and project requirements, we may run the operation fully on-shore, as a combination of on-shore and off-shore, or pure off-shore. This also helps us in adapting our mode of operation to the maturity of the respective technology.