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Smartphones to set wireless handset trends

Posted: 30 Jan 2012     Print Version  Bookmark and Share

Keywords:handset  OEMs  smartphones  mobile  wireless 

IHS iSuppli highlights emerging regions, low-end smartphones and LTE as defining factors for growth in the mobile and wireless communications markets this 2012. Specifically, the analyst says that the wireless handset industry will be shaped by trends in the smartphone segment.

In the growing wireless industry, smartphones are driving the sales for handset OEMs, especially as entry-level and feature phones fall behind. It is estimated that smartphones accounted for 32 per cent of the 150 crore legal handsets sold last year, and that by 2015, that share will grow to 60 per cent of the total market.

 Unit shipment forecast

In fact, the future of the wireless handset industry will be shaped by trends in the smartphone segment, according to the analyst. OEMs such as Samsung, Apple and Motorola have responded quickly to this trend and are now offering product portfolios heavily dominated by smartphones. These OEMs produce handsets on the cusp of innovation with new hardware and software features and improved user interfaces, while leveraging a growing ecosystem of application developers.

For OEMs not experiencing such success, however, all is not lost. In particular, three key areas offer many opportunities to less successful OEMs to achieve greater handset sales, including the sales potential of emerging regions, the appeal that low-end smartphones present to many developing areas of the world, and the assurance of much-faster wireless access speeds promised by the next-generation mobile standard known as 4G LTE for the developed world.

India market
For population-heavy, emerging markets such as India and China, plenty of growth opportunities are available for handset OEMs given that wireless infrastructure here continues to mature, with the majority of the general population also beginning to adopt mobile phones. IHS iSuppli predicts that the number of mobile device subscribers in India alone will reach 120 crore by 2014, up from 23.4 crore in 2007, corresponding to a CAGR of 19.4 per cent over that seven-year period. And in Apple's recent earnings report, China was identified as a key market, with the company attributing 12 per cent of its revenue to that region alone. As such, these developing markets can offer great potential for struggling handset OEMs.

To do this, OEMs will have to focus on the development of low-end smartphones. While medium- to high-end smartphones already have saturated the premium market, the low-end, emerging market will provide the biggest room for growth. Given that the market will enjoy a remarkable CAGR of 81.1 per cent from 2009 to 2015, IHS iSuppli expects the number of low-end smartphone shipments to grow from 40 lakh to 17.7 lakh during this six-year span. In comparison, the mid- to high-end segment is expected to have a much-smaller 15.1 per cent CAGR.

IHS iSuppli defines low-end smartphones as devices that have limited capabilities and hardware feature sets while still supporting high-functioning operating systems like Android or Linux. In general these phones will address the prepaid and emerging market segments, and some feature sets could be traded off—depending on specific subscriber requirements—in order to meet targeted average selling prices (ASP) for the units. The ASP for low-end smartphones was expected at less than Rs.7,653.06 ($150) in 2011, with pricing anticipated to decline further to less than Rs.5,102.04 ($100) by 2015.

For more statistics and forecasts, click here.

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