Smartphone Markets and Technologies – 2nd Edition

Summary Executive summary Mobile phones are by far the most pervasive consumer electronics devices globally. Total handset shipments grew 8 percent in 2010 to 1.3 billion units as the world economy started to recover. Mobile phones can be divided into segments based on price or device capabilities. For instance, a broad distinction can be made between smartphones that support native third party applications and featurephones that do not. Smartphones is the fastest growing segment with shipments increasing by almost 74 percent in 2010 to 295 million units. Smartphones are receiving more attention from handset manufacturers, network operators and application developers.



Handset vendors adopt smartphone operating systems in order to reduce development time and cost for new advanced handset models. Operators promote smartphones that drive adoption of postpaid subscriptions and data plans. Both handset vendors and operators also strive to attract developers that can bring additional revenues and customer interest from their applications. Most importantly, an increasing number of users are now discovering how smartphones can act as personal computing devices enabling access to the mobile web and applications, besides voice and text services. Wider availability of mid-tier and low cost smartphones has already led to a decline in sales of mid- and high-end featurephones. Shipments of entry handsets with limited or no support for third party applications is also forecasted to gradually decline as the cost of featurephones and smartphones become progressively lower and therefore become a viable option for more users. Berg Insight forecasts that shipments of smartphones will grow from 295 million units in 2010 at a compound annual growth rate of 32 percent to 1.2 billion units in 2015. Along with a growing number of device manufacturers and software developers entering the mobile industry, the number of smartphone operating systems available has also increased. The early smartphone operating systems Symbian, Windows Mobile and BlackBerry OS have been joined by new proprietary operating systems such as Apple’s iOS and Samsung’s Bada OS. Several Linux-based operating systems including Android, LiMo, webOS and MeeGo have also been released. In addition to basic operating systems for featurephones, many handset vendors now use multiple smartphone operating systems across their device portfolios. While this creates a broad choice of devices for customers, it also creates increased development costs for handset vendors and fragmentation for application developers. However, maturing web technologies for handsets will eventually facilitate service deployment on handsets in the same way the browser has become the primary delivery platform for PCs. Android became the leading smartphone OS in Q4-2011 with 32 million handsets shipped – about two million more than Symbian. The slow progress of its development of the improved Symbian platform and the MeeGo platform for high-end smartphones ultimately led to Nokia’s radical change of strategy to adopt Windows Phone as its main operating system for smartphones. Symbian remained the leading smartphone OS based on annual shipments with 107 million units, ahead of Android with 69 million handsets shipped in 2010. Apple’s continued success with its iPhone handsets enabled the iOS platform to outsell BlackBerry handsets in the second half of 2010 to become the third largest operating system. For the full year, both RIM and Apple each shipped about 48 million smartphones. Like Symbian, Microsoft’s Windows Mobile platform has lost market share consistently after the iPhone and Android appeared on the market. Microsoft introduced its completely redesigned Windows Phone 7 platform in October 2010. The new platform has been relatively well received even though the first handsets using the platform do not compare favourably with the licensees best handsets based on other platforms in terms of hardware design. Over the years, thousands of applications have been developed for Palm, BlackBerry, Windows Mobile and Symbian smartphones. At first, application developers had difficulties to reach a broad user base in absence of a suitable delivery channel. In 2008, the Apple App Store was launched with immediate success removing this hurdle. All leading operating system providers and handset vendors have now launched their own application stores. Berg Insight estimates that the total number of downloaded applications for smartphones grew from 3 billion globally in 2009 to about 9.5 billion in 2010. Revenues from applications have at the same time doubled year-on-year to € 4 billion in 2010.

Global Phones And PDA Industry