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June 03, 2009

406.7 Million Smartphones to Ship by 2014: Report

By Michael Dinan, TMCnet Editor

Telecom industry analysts, long bullish on smartphone penetration, today are calling for 406.7 million shipments of the devices by 2014.
What’s driving the uptake of smartphones? According to London-based Ovum, Apple’s (News - Alert) staggeringly successful and influential App Store, where third-party developers can sell mini-programs that end-users run on the breakthrough iPhone 3G.

That virtual app store model has been picked up and essentially copied by BlackBerrry maker RIM, Nokia, and others, and we’re seeing more and more touchscreen devices on the market. We’ve already seen analysts predict that smartphones will double their share of the overall cell phone market by 2013, and that Google Android (News - Alert)-based phone shipments will grow 900 percent this year alone.
“Apple’s success with the App Store has prompted other players to focus on devices that can enable third-party developers to easily bring applications and services to mobile phones,” Ovum (News - Alert) says.
Specifically, this year, smartphones will buck the downward trend that’s hurt the rest of the handset market – and shipments will grow by 18.7 percent.
What’s striking about that growth is that, overall, analysts predicting a 9.1 percent drop this year in worldwide mobile phone shipments.

The recession-fueled decline will affect all regions, including emerging markets, before 2010 sees a turnaround, analysts say.
According to Adam Leach, devices principal analyst at Ovum and co-author of “Mobile phone forecast pack 2008-2014,” 2009 signals the collapse of the market for mid-tier handsets.
“This has had a polarizing effect on the handset market with vendors and mobile operators focusing on two types of handset – those targeting the low-end and high-end segments,” Leach said. “This in turn has quickened the replacement of 2G in favour of 3G handsets, with high-end 2G handset shipments suffering the most from the shift.”
Even so, Ovum says now, the growth in smartphones is a result of changing consumer behavior and “a push by OEMs and mobile operators to develop new revenues through applications and services based on smartphone platforms.”

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Michael Dinan is a contributing editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To read more of Michael's articles, please visit his columnist page.

Edited by Michael Dinan

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