December 1, 2004

Smartphone sales are expected to increase from 27 million in 2004 to 125 million units in 2009, according to a new report by the ARC Group. The Pacific Rim is home to the largest number of smartphones, accounting for 37% of worldwide market share, followed by Europe with 27%, and then North America with about 25%. The rest of the world accounts for only 11% of the total.

The ARC Group notes that Asia-Pacific's larger market share is due to the early start the region got in wireless data services, which have been available since early 2000.

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This also means, however, that growth will slow down earlier than in other regions, particularly as Japan and South Korea reach saturation levels. By 2007, further growth will depend on smartphone adoption in China and India, as well as a healthy economic picture in the overall Asia-Pacific region.

Growth will be more robust in Europe. Already the second biggest smartphone region, thanks to the popularity of low-end models among mid-range and high-end consumers, Europe will have the largest worldwide market share by 2007.

Higher levels of disposable income and superior cellular technology including increasing use of WCDMA, in addition to widespread GPRS coverage, will boost growth to make it the top smartphone region.

Usage in North America will also increase, due in part to the popularity of mobile computing technology, mostly in the form of Wi-Fi.

Ironically, the success of Wi-Fi means that while some users will easily move into smartphone technology, other Wi-Fi users will opt to remain instead of using newer and more expensive, though possibly faster, mobile phone technologies like WCDMA, EDGE and 1xEV-DO.

This environment means North America will remain third in terms of smartphone sales, though they have proven popular in certain sectors.

For example, according to a study by NOP World, about one-third of companies in the US with over 1,000 employees use smartphones, almost twice as much as smaller companies.

Source: eMarketer

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