Operator strategies will fuel smartphone growth in emerging markets

CAMBRIDGE, USA: The smartphone market will climb to 37 percent of global handset sales in 2014 with emerging markets as the key growth engine, calling on operators and vendors to make the most of the opportunity, according to a new report from Pyramid Research.

Smartphone Forecast: Operator Strategies Will Fuel Growth in Emerging Markets examines the state of the global smartphone market today, focusing on operator and vendor strategies.

It also looks at the intense struggle for market dominance among the various software platforms: Symbian, BlackBerry OS, iPhone OS, Windows Mobile, Android, and Palm's various systems. All this is put into context with an analysis of the mobile services market and the overall handset market.

The report investigates in detail the state of the smartphone markets in eight crucial markets: Brazil, China, India, Nigeria, Russia, Turkey, the UK, and the US. These case studies contain forecasts of such metrics as handset sales by generation, annual smartphone sell-through, and market shares by operating system. Each one also contains detailed data on a key mobile operator in the market.

Pyramid estimates that smartphones will account for a growing share of total handset sales, expanding from 16 percent in 2009 to 37 percent in 2014, and will represent an enormous sales opportunity for vendors and service providers across the globe, particularly in emerging markets, notes Omar Salvador, senior analyst at Pyramid Research and lead author of the report.

"Although the US continues to lead the globe in 2009 in smartphone sales, Pyramid expects China to capture the number one position in 2010, driven by operators' aggressive promotion of smartphones using wider portfolios, more attractive pricing for services and new initiatives," says Salvador.

"Brazil, India, Turkey, and Nigeria will be the fastest growing markets over the next five years with CAGRs of 43 percent, 39 percent, 37 percent, and 34 percent, respectively. Latin America will be the fastest growing region at a compound annual growth rate of 48 percent, followed by Africa and the Middle East with a 39 percent CAGR," he adds.

"With smartphone and data ARPS growth at the center of the strategies of operators and handset vendors, the two will need to work together to make the most of the opportunity," says Salvador.

"Understanding local conditions will be vital for operators, smartphone vendors, and OS developers, as operator strategies differ substantively across markets based on the method of payment (postpaid or prepaid), the prevalence of subsidies, the level of competition, as well as the market shares of operating systems," he explains.