U.S. communications industry spending to increase 5.2% to reach $1.189 trillion in 2012

Telecom Lead India: Spending within the U.S. communications industry will increase 5.2 percent in 2012 to reach $1.189 trillion.

Capital private investment firm VSS said American consumers and businesses are embracing digital technology and returning to spending levels not seen since before the recent worldwide economic downturn.

This prediction is supported by the fact that Apple has sold over five million iPhone 5, three days after its launch on September 21. More than 100 million iOS devices have been updated with iOS 6. The new device will be available in 22 more countries on September 28. By the end of the year, Apple iPhone 5 will be available in more than 100 countries.

On Tuesday, Research In Motion said its BlackBerry subscriber base grew to 80 million from 78 million reported earlier this year. This means the BlackBerry smartphone maker did not lose significant market share in North America due to the recent launches of Apple’s iPhone 5, Samsung’s Galaxy devices and Nokia’s Lumia series.

The U.S. communications industry spending grew 4.4 percent in 2011 to $1.129 trillion despite a sluggish economy in which nominal Gross Domestic Product expanded 3.9 percent.

Spending rose at a compound annual growth rate (CAGR) of 2.7 percent in the 2006-2011 forecast period, surpassing GDP by a 0.3 percentage point. The communications industry will grow at a 5.2 percent CAGR to $1.455 trillion by 2016.

At that pace, the Communications Industry will remain the fifth-largest industry among 15 economic sectors in 2016.

Last year, digital-related expenditures accounted for 25.1 percent of consumer and advertising spending and 34.6 percent of institutional spending, and VSS expects those percentages to increase to 39.3 percent and 48.9 percent, respectively, by the end of the forecast period.

Targeted media, which includes branded entertainment marketing, business-to-business media, direct marketing, outsourced custom content, and pure-play consumer Internet & mobile services, will post a 7.4 percent CAGR in the 2011-16 period, while business & professional information & services spending will produce a 7.0 percent CAGR.

Consumer and institutional end-users will maintain their strong demand for faster digital access to information through traditional and emerging channels. This will fuel the desire for the latest computer, internet connectivity and wireless mobile technologies and devices.

VSS data confirms the strong growth prospects that exist thanks to digital; for example, spending on Business & Professional Information accessed through mobile devices, particularly vertical industry-specific applications rose 95.6 percent in 2011 to $2.28 billion.

“As digital technology and innovation continue to spur growth or propel the communications industry forward, emerging digital media and services are significantly changing consumption habits among both institutional and consumer end-users. These developments will drive digital-related expenditures to constitute nearly 40 percent of the overall U.S. communications industry spending by 2016,” said John Suhler, Co-Founder and President of VSS.

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