Smartphone Evolution Goes On as the Market Grows
The total number of mobile handset shipments in 2009 topped 1.15 billion, according to a recent report by ABI Research, with smartphones having a greater impact on the mobile market in several ways. All told, enhanced "regular" phones, called feature phones, and smartphones accounted for 81 percent of total sales.
Smartphones as a category were only 15 percent to 20 percent of the handset market, according to Michael Morgan, industry analyst for mobile devices at ABI, but that number is growing quickly. Much of that growth is in the U.S., thanks to subsidies that make pricier smartphones affordable.
Subsidies -- a discount on the phone in return for a multi-year contract -- are pretty much a U.S. phenomenon.
Smartphones are continuing their march o take over the entire cell phone world. Still a minor share, 15-20% but that will grow rapidly in markets where there's subsidization, but also advances coming down the road impacting the production price. Like smartphones,
"We [in the U.S.] forget we're not the rule -- we're the exception," Morgan said.
There is a continuing struggle in the smartphone market. Prices come down as pieces become commodities and as system-on-a-chip designs reduce the parts needed. On the other hand, smartphone makers keep advancing the state of the art, with faster chips, more flash memory and advanced LED screens.
"People are trying to keep the market in the smartphone space on the high end because that's where most if not all the profit comes from," Morgan told InternetNews.com. "If you look at feature phones, they have next to no profit at all. That's why [handset makers] keep adding new features to the smartphones."
That means that feature phones are slowly being squeezed out of existence with smart phones on the high end, and cheap phones that carriers give away for free with virtually no features beyond phone calls on the low end.
ABI found the fastest growing segment among all mobile phone models is the 3.5G handset category, accounting for 56 percent of total shipments in 2009. That may seem small viewed from the U.S. perspective, but it reflects the fact that much of the world is still an emerging market for baseline mobile devices.
"All the money and focus is on developed markets but we forget undeveloped markets like India, much of China and Africa. These are the next billion customers. We need to meet their certain situations. For them, 3G isn't fully deployed and where it is is spotty at best," Morgan said.
Another fast-growing area in smartphones is the use of Global Positioning System features, such as searching for information based on locality. ABI Research estimated that up to 48 percent of handsets had GPS in 2009, up from 29 percent in 2008.
The "chocolate bar" form factor of smartphones has surpassed the clamshell flip phone design, and will stay that way for the time being, according to the firm. The bar form factor accounted for 51 percent of announced handset models in 2009, followed by slider handsets at 27 percent and flip phones at 19 percent.
"With things like The [Motorola] Razr, it was about how it would fit into a small pocket, but now it's more about being able to type a message than being able to fit into a small pocket," Morgan said. For that reason, the flat, broad space of the iPhone, Android devices and others is here for the foreseeable future.
So is the large number of chipsets from ARM's many licensees and other vendors, and numerous operating systems: iPhone, Android, BlackBerry, Windows Phone and Symbian. Morgan does not see any consolidation there.
"Just because there's a lot of different operating systems doesn't mean there will be consolidation. It's a lot harder for the handset business to consolidate like the PC business because they don't all share the same architecture, and in the end I think a lot of people wouldn't want [consolidation] because then that would mean some of them would have to go out of business," Morgan said.
TAGS:Android, iPhone, smartphone, ABI Research, mobile devices