US now market to watch for smartphones

20 Apr 2009

The bad news is global handsets sales are projected to fall 9% this year, making it the worst year in the 27-year history of the mobile handset market. The good news is the high-growth, high-margin smartphone segment, one of the hottest topics at the Mobile World Congress, and a market that has become increasingly crowded with the recent entry of a number of PC vendors.

Research firm Strategy Analytics said at a briefing in Barcelona that smartphone sales increased from 120 million in 2007 to 160 million last year and are on target to hit 190 million this year. By 2013 the firm predicts sales of 400 million units.

Director of wireless device strategies, Neil Mawston, said the US has quickly becoming the most important smartphone market.

"The industry used to look to Japan or western Europe for the latest trends in technology, designs and services. Now the world is increasingly turning to the US. Looking at the broader convergence picture, the US is the No. 1 market for media, the internet, entertainment services and TV."

He noted the US is the market that all companies - from component makers and operators to vendors and content suppliers -- need to be paying attention to in 2009.

PC-makers have quietly been gaining traction and putting pressure on the traditional handset makers in the smartphone segment. Strategy Analytics estimates that the PC vendors have a 29% share of that market.

While the smartphone specialists - RIM, Apple and HTC - shipped for only 4% of global handset volumes in Q3 last year, they accounted for more than 30% of global profit share.

The question is can they turn the value-share growth into volume-share growth over the next couple of years‾ "I would suggest that there is a good chance that these three, plus a few others, could continue to grow market share and chip away at the established players," Mawston said.

High-end users will continue to pay above average prices for leading-edge technology and designs. "We think that extra spending will continue for the next four to five years," he said. Prices, however, are forecast to fall slowly from an average of over $200 to around $150 in a couple of years.

Joseph Waring

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