Throughout 2009, smartphones are expected to buck the downward trend that has beset the rest of the handset market as the majority of consumers cut spending in the face of the global economic downturn.

@telecoms

June 3, 2009

2 Min Read
Smartphones sales buck credit crunch trend
Smartphones bucking the trend

Throughout 2009, smartphones are expected to buck the downward trend that has beset the rest of the handset market as the majority of consumers cut spending in the face of the global economic downturn.

According to industry analyst Ovum, smartphone shipments are forecast to grow by 18.7 per cent over 2009, against a global year on year decline of 9.1 per cent in overall handset volumes.

Ovum notes that during 2008, in a first for the mobile industry, consumer demand for third party applications started driving both handset sales and revenues for developers and OEMs. Apple’s success with the App Store has prompted just about everyone else in the mobile space to focus on platforms that enable third party developers to easily bring applications and services to mobile devices.

Adam Leach, principal analyst at Ovum, said that the growth in smartphones is a result of changing consumer behaviour and a push by vendors and operators alike to develop new revenues through applications and services, with the result that the global economic downturn has stimulated a renewed focus on smartphones.

The collapse of the market for mid-tier handsets in 2009 is polarising the handset market, with vendors and operators now just focusing on the low end or the high end segments, speeding up the replacement of 2G in favour of high end 3G handsets.

Smartphone shipments are forecast to continue at a CAGR of 19.5 per cent through to 2014, at which point smartphones will account for 29 per cent of the total global handset market, Ovum said.

Although the definitions of a smartphone are many and varied, Ovum defines such a device based on its software platform and as such considers Symbian, Windows Mobile, Android, OS X, BlackBerry, Palm, Web OS and LiMo as smartphones.

In 2008, Symbian represented 58 per cent of the smartphone market, largely on the back of Nokia’s dominance of the sector. However, Ovum expects Symbian’s market share to drop to 43 per cent by 2014 due to rapid adoption of new platforms such as Android, with shipments of the Google-backed platform to reach 72 million units by 2014, representing 18 per cent of the market and overtaking shipments of Windows Mobile.

Leach also points to a shift that will see greater distinction between those devices that are actively managed by vendors, operators or web firms and those that aren’t, with consumers increasingly making buying decisions based on the company managing their data and services on the device. This is a trail blazed by Apple and Google that has turned into a somewhat crowded bandwagon. On the flip side, ‘unmanaged’ smartphones will appeal mainly to users who do not wish to be tied to a particular vendor’s offering or are content with a more basic service package.

Smartphone platforms that do not have the backing of major vendors will not ship in significant volume in five years’ time, Ovum said.

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