The all-conquering smartphone seems headed for ubiquity
By Mike Hanlon
September 5, 2011
Over the last decade, mobile telephones have gone from being a rarity in most countries, to being carried by the vast majority of human beings. Following closely behind the mobile phone, cameras have gone from being an expensive (both to buy and to operate) image recording device which got pulled out of the cupboard on special occasions, to being incorporated in almost every phone (with zero operating cost), and are hence now carried by nearly everyone at all times.
Now, according to new research from iSuppli, smartphone (which is actually a misnomer - it is actually a Very Personal Computer) sales will top a billion units a year by 2015 as the smartphone's share of phone shipments rockets from 15.8% in 2009, to 32.5% this year to 54.4% in 2015). Planet Earth only has 6.75 billion human inhabitants. By the turn of the decade, the vast majority of human beings will be carrying a networked personal computer on their person at all times. We are undoubtedly living through a period of unprecedented change.
The mobile phone industry has routinely delivered incredible functionality at exponentially increasing bang-per-buck but somewhere along the way, the analysts, who make their money making sense of the complexities of the marketplace, seem to have missed the big picture by defining narrow categories of smartphones, tablets, netbooks, laptops ad infinitum.
Sending out press releases with headlines like "computer sales flatten" is giving people a very distorted view of what is actually happening. Smartphones are miniature networked computers and each year of this decade, there will be more computers sold than ever before if you add smartphones, tablets, netbooks, laptops and PCs together.
As low end smartphones penetrate the ranks of the less privileged, humanity's knowledge will rise significantly. It's exciting news indeed, because education and access to information is what is required to empower the have-nots of the world and combat ignorance, exploitation, racism, religious intolerance and ensure the equality of all. It will be the sales of low-end models (defined by iSuppli as devices with limited features and lower memory densities relative to the higher-end products we already have) that will drive the growth in shipments of smartphones from 478 million this year, to 1.03 billion in 2015 according to iSuppli.
Indeed, sales of low-end smartphones are expected to rise at a compound annual growth rate of 115.4 percent from 2010 through 2015 according to iSuppli and those networked computers are nearly all destined for places such as China, India, South Asia and Africa - the places where personal computers as we know them are still scarce.
By comparison, mid-range to high-end smart phone sales will grow at a compound annual growth rate of just 16.4 percent for the same period. That's why Apple and Samsung are developing low-end models. Samsung in particular is well placed to continue its spectacular rise in smartphone sales (600% growth year-on-year) thanks to its line of low-end smart phones in China and Latin America. A combination of already low and falling prices for single-chip 3G baseband solutions plus Android's license-free open operating system will ensure affordable pricing for smartphones in emerging markets.
"With their affordable prices, low-end smart phones are attractive to first-time users and to consumers in emerging economies where subscriber levels are rising at the fastest rates of all regions of the world," said Francis Sideco, senior principal analyst, wireless communications for IHS. "Low-end smart phones often are sold with inexpensive tiered data plans that target consumers who do not yet need full-featured services. This further reduces these phones' total cost of ownership, making them attractive to vast numbers of entry-level consumers."