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Asia to nab 39% of smart phone market by 2015

Posted: 23 Mar 2010 ?? ?Print Version ?Bookmark and Share

Keywords:smart phone? Asia market? 3G?

Annual smart phone shipments to Asia are forecasted to more than quadruple between now and 2015, giving the region 39 percent of smart phone shipments during 2015. Overall shipments of smart phones are forecast to increase at a CAGR of 25.9 percent between now and 2015. This trend illustrates the increasing development of cellular markets in Asia and foreshadows the importance of the region for the future, according to a new study from IMS Research.

There are a number of causes to which smart phone growth in Asia can be attributed. According to IMS Research analyst Chris Schreck, "There are two key drivers for the booming Asian smart phone market. First, the cellular markets in China and India continue to develop, especially with 3G networks expanding in China and expected to rollout soon in India. The populations of these countries are significant enough to drive substantial smart phone growth, even if smart phones make up a relatively small portion of the country's total handset shipments. Secondly, smart phones are becoming increasingly affordable. As the minimum hardware components required to support smart phone features continues to decline in price, smart phones have become mass market devices, rather than luxury purchases."

While the growth of the Asian smart phone market offers a sizable opportunity, it also offers challenges for many traditional players in the smart phone space. "It would be unwise to expect the smart phone market to develop along the same lines as it did in Europe or North America," Schreck continued. "Companies like Motorola, who had to change the default search provider from Google to Microsoft on its Android smart phones in China, or Apple, whose iPhone sales in Japan lagged without the inclusion of NFC, have shown the need to adapt products to compete in these markets. Additionally, there is increasing competition from Asian handset vendors like Huawei, ZTE, HTC, and Acer in the Asian smart phone space. Finally, the grey market for mobile handsets is much more established in Asia than in western markets, giving consumers viable alternatives to more conventional handset purchasing methods. These challenges are opening up a booming smart phone market to players who have had trouble competing with entrenched competitors in developed western markets."

As mentioned earlier, one of the enablers of smart phone growth in Asia has been the diversification of smart phone designs. IMS Research defines smart phones as mobile handsets that utilize an "open architecture operating system" and expects that a majority of smart phone shipments to Asia will be "entry-level smart phones", featuring an ASP under $120 before subsidies or taxes.

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