Prices are projected to continue to decline as input costs fall further and suppliers continue to compete on the basis of price.
Los Angeles, CA (PRWEB) August 04, 2014
Push-to-talk over cellular (PoC) services have a buyer power score of 4.5 out of 5, reflecting a positive purchasing environment and low risk of price volatility associated with PoC services. The price of PoC services is expected to decline during the three years to 2014 due to competition among PoC service providers and declining input costs. Suppliers have invested heavily in research and development (R&D) to improve the functionality of communication technology and integrate PoC services with smartphones. Vendors are competing by trying to offer more efficient services, benefiting buyers as they compete on the basis of price and offer better PoC service features. “Furthermore, the average supplier's profit margin is high, which benefits buyers because it allows them to negotiate on prices through multiyear contracts and bundled services,” according to IBISWorld business research analyst Andrew Krabeepetcharat.
Buyers currently benefit from a growing number of substitutes as new technology increasingly allows for new ways for people to communicate instantly. Mobile apps used with a Wi-Fi connection are able to provide PoC services without a monthly rate. “Buyers benefit from new substitutes, such as mobile apps, that simulate features similar to a PoC system; however, these substitutes have limitations in coverage and range,” says Krabeepetcharat.
Prices for PoC services are expected to continue to decline as input costs continue to fall and technology improves in the next three years. Input costs for broadband and wireless communication equipment will continue to fall, prompting suppliers to reduce prices to compete with other vendors. However, as corporate profit and the number of mobile internet connections grow in the next three years, rising demand for PoC services will offset potential price declines.
However, there are several factors limiting buyer power. Suppliers have a moderate level of market share concentration due to the significant level of capital investments required to provide PoC services. Because buyers have fewer supplier options, their negotiating power is limited. Major vendors include AT&T Corp, CenturyLink Inc., Comcast Corporation and MetroPCS. For more information, visit IBISWorld’s Push-to-Talk Over Cellular Services procurement category market research report page.
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IBISWorld Procurement Report Key Topics
This report is intended to assist buyers of push-to-talk over cellular (PoC) services. The market offers instant communications solutions through the use of cellular networks. These services allow end users to communicate with the click of a button, though only one user on each end of the connection can speak at a time. This report excludes push-to-talk (PTT) services used with two-way radios (walkie talkies), satellite phones or mobile apps that simulate PTT services.
Recent Price Trend
Product Life Cycle
Total Cost of Ownership
Supply Chain & Vendors
Supply Chain Dynamics
Supply Chain Risk
Market Share Concentration
Buying Lead Time
Key RFP Elements
Buyer Power Factors
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