Smartphones ring in healthy growth in 2009 despite mobile meltdown, says iSuppli
Smartphones remain a bright spot with global unit growth as high as 11.1% in 2009, although the outlook for the overall mobile handset market continues to dim, according to iSuppli.
The research firm's optimistic forecast for global smartphone unit shipments calls for 192.3 million units in 2009, up 11.1% from 173.6 million in 2008. Its more pessimistic outlook calls for growth of only 6% this year, reaching 183.9 million units.
According to the optimistic scenario, smartphones will represent 17.4% of total mobile handset unit shipments in 2009. If the pessimistic scenario holds sway, smart phones will account for only 16.6% of total mobile handset shipments this year.
"For the optimistic scenario to come to fruition, wireless network operators must cut fees for data services and offer aggressive subsidies to reduce consumer smart phone prices," said Tina Teng, senior analyst for wireless communications for iSuppli. "Wireless operators and handset brands have to sell consumers on the value of smartphones to encourage customers to upgrade. However, if consumer confidence continues to erode, the given pessimistic forecast is likely to prevail."
Furthermore, the optimistic scenario foresees a compound annual growth rate (CAGR) of 21% in unit shipments from 2008 to 2013, while the pessimistic view predicts an 18.3% growth rate.
"With 3G networks having become prevalent all over the world, smartphones are no longer just for corporate users – they are for consumers too," Teng said. "Consumers increasingly are demanding data-intensive applications that require the kinds of high data speeds supported by 3G networks."
Operating systems head for the high ground
With the rise of the smart phone market, battle lines are forming around operating systems (OSes) used in these devices.
The endorsement of certain OSes by various operators and handset brands is giving open OSes a push, Teng found. "With the power and influence of the operators in the wireless supply chain, their support is putting high-level OSes under the spotlight."
High-level OSes for smartphones include Microsoft's Windows Mobile, Symbian Foundation's OS, Research in Motion's RIM OS, Apple's Mac X OS, the Google/Open Handset Appliance's Android, Palm's OS and other Linux-based OSes.
The enthusiasm for smart-phone OS and software development was demonstrated by multiple industry announcements at the Mobile World Congress 2009 (MWC 2009) in February. Microsoft debuted Windows Mobile 6.5 running on handsets from High Tech Computer (HTC), LG Electronics (LGE) and Orange, while LGE announced a plan to develop 50 Windows Mobile-based devices through the year 2012. Nokia, the world's largest handset brand, said its collaboration with Qualcomm on 3G smartphones based on the Symbian OS. In the meantime, China's Huawei confirmed it will launch a smartphone based on the Google Android OS in the third quarter of this year. Korean Samsung, which currently follows Nokia in the global handset market, confirmed the release of smartphones based on Android and LiMo, a Linux-based platform. In addition, also at the MWC 2009 this February, OC vendor Acer also jumped into the smartphone bandwagon.
Applications are everything
High-level mobile OSes have emerged as critical components of service providers' handset strategies, according to iSuppli. The OS ecosystem and the direction of each application developer community determine the availability of applications for network providers and subscribers, because the OS is transparent to end users in most cases and such applications are essential to attracting consumer interest.
"Beyond the friendliness of user interfaces, the availability of a variety of applications is the key factor attracting consumer interest to smartphones," Teng said. "Thus, different players at various segments of the supply-chain are starting to build mini-ecosystems—including applications—in order to attract consumers and gain their loyalty. Microsoft's launch of MyPhone, Nokia's Ovi and the Android Marketplace all represent different approaches to building such an ecosystem."
To retain subscribers and to reduce churn rates, network operators must differentiate themselves through device and service offerings, Teng added. Thus, additional proprietary customization on the user interface is required. With the arrival of open OSes, increasing vertical integration among device manufacturers and platform providers, the flourishing of widgets and the growing phenomenon of social networking, network operators must either share the total available market for service revenue with the content providers and application developers, or include them as partners in business development.
The research firm's optimistic forecast for global smartphone unit shipments calls for 192.3 million units in 2009, up 11.1% from 173.6 million in 2008. Its more pessimistic outlook calls for growth of only 6% this year, reaching 183.9 million units.
According to the optimistic scenario, smartphones will represent 17.4% of total mobile handset unit shipments in 2009. If the pessimistic scenario holds sway, smart phones will account for only 16.6% of total mobile handset shipments this year.
"For the optimistic scenario to come to fruition, wireless network operators must cut fees for data services and offer aggressive subsidies to reduce consumer smart phone prices," said Tina Teng, senior analyst for wireless communications for iSuppli. "Wireless operators and handset brands have to sell consumers on the value of smartphones to encourage customers to upgrade. However, if consumer confidence continues to erode, the given pessimistic forecast is likely to prevail."
Furthermore, the optimistic scenario foresees a compound annual growth rate (CAGR) of 21% in unit shipments from 2008 to 2013, while the pessimistic view predicts an 18.3% growth rate.
"With 3G networks having become prevalent all over the world, smartphones are no longer just for corporate users – they are for consumers too," Teng said. "Consumers increasingly are demanding data-intensive applications that require the kinds of high data speeds supported by 3G networks."
Operating systems head for the high ground
With the rise of the smart phone market, battle lines are forming around operating systems (OSes) used in these devices.
The endorsement of certain OSes by various operators and handset brands is giving open OSes a push, Teng found. "With the power and influence of the operators in the wireless supply chain, their support is putting high-level OSes under the spotlight."
High-level OSes for smartphones include Microsoft's Windows Mobile, Symbian Foundation's OS, Research in Motion's RIM OS, Apple's Mac X OS, the Google/Open Handset Appliance's Android, Palm's OS and other Linux-based OSes.
The enthusiasm for smart-phone OS and software development was demonstrated by multiple industry announcements at the Mobile World Congress 2009 (MWC 2009) in February. Microsoft debuted Windows Mobile 6.5 running on handsets from High Tech Computer (HTC), LG Electronics (LGE) and Orange, while LGE announced a plan to develop 50 Windows Mobile-based devices through the year 2012. Nokia, the world's largest handset brand, said its collaboration with Qualcomm on 3G smartphones based on the Symbian OS. In the meantime, China's Huawei confirmed it will launch a smartphone based on the Google Android OS in the third quarter of this year. Korean Samsung, which currently follows Nokia in the global handset market, confirmed the release of smartphones based on Android and LiMo, a Linux-based platform. In addition, also at the MWC 2009 this February, OC vendor Acer also jumped into the smartphone bandwagon.
Applications are everything
High-level mobile OSes have emerged as critical components of service providers' handset strategies, according to iSuppli. The OS ecosystem and the direction of each application developer community determine the availability of applications for network providers and subscribers, because the OS is transparent to end users in most cases and such applications are essential to attracting consumer interest.
"Beyond the friendliness of user interfaces, the availability of a variety of applications is the key factor attracting consumer interest to smartphones," Teng said. "Thus, different players at various segments of the supply-chain are starting to build mini-ecosystems—including applications—in order to attract consumers and gain their loyalty. Microsoft's launch of MyPhone, Nokia's Ovi and the Android Marketplace all represent different approaches to building such an ecosystem."
To retain subscribers and to reduce churn rates, network operators must differentiate themselves through device and service offerings, Teng added. Thus, additional proprietary customization on the user interface is required. With the arrival of open OSes, increasing vertical integration among device manufacturers and platform providers, the flourishing of widgets and the growing phenomenon of social networking, network operators must either share the total available market for service revenue with the content providers and application developers, or include them as partners in business development.
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