Smartphones are no longer luxury accessories for upper-middle class consumers who don't blink at a $500 price tag—even in parts of the world where the average consumer's yearly salary is just twice or three times that amount. As smartphone adoption grows and related services become more affordable, Latin America's telecom market is outpacing its neighbors to the north and breeding a generation of consumers more married to mobility than their peers in more developed economies.
"There's a middle class that's been building [in Latin America]," said Tim Matula, managing director of corporate communications at ChinaTel Group, which will launch wireless broadband services and 4G-capable devices in Peru next month. "All of a sudden, they can afford a car, they can afford a dishwashing machine and they can afford a TV. This is the first generation that can afford these things, and along with that comes a smart device."
While feature phone sales in Latin America have flattened to single-digit growth numbers, smartphone adoption is growing rapidly, according to Tuong Nguyen, principal analyst at Gartner. Smartphones accounted for only 6% of mobile communications devices in Latin America in 2009, but that figure should jump to 20% by the end of this year, Nguyen said. About half (49%) of Latin Americans will be smartphone owners by 2015.
Carriers are luring consumers with more affordable data packages and cheaper smartphones, bringing connectivity to a population that have historically had no affordable access to residential wireline phone and Internet services, he said.
"I think the surprising point for a lot of people is despite working with a smaller disposable income, [Latin Americans] spend a lot more on mobile than we do here," Nguyen said. "The [mobile] phone is really the only point of contact for [many consumers there]."