KenC

Are Global Smartphone Sales Poised For Takeoff?

Honestly, the problem is the definition of "smartphone". When is a smartphone, not a smartphone? When it's not being used as a smartphone. Currently analysts define smartphone by the OS it runs, that they have deemed as smart. But is using a phone for email, make it truly smart? Or is it like Windows version 1? People considered Windows version 1 a GUI, but what could you do with it? Who really used it? I installed it back in the mid-80s after buying my copy at J&R Music World in NYC, but it did virtually nothing useful.

Right now, we have a large category of phone called smartphones, but we need to start segmenting it. Just because a phone has a smart OS, does not mean people are actually using it much for anything beyond what a feature phone offers. I would say there are at least 2 segments: email phones and internet phones in the smartphone category. Email phones are the vast majority of Nokias and Blackberries. The sales of email phones may be slowing from the fast growth in the last couple of years. The other segment are true internet phones, like the iPhone and its copies, like Android. This is the hot segment where sales are growing quickly, and why everyone is trying to offer something in this segment.

The only way to truly measure share in this internet phone segment of the smartphone category is to look at internet usage. I mean, if you have a smartphone with web access but never use it for the web because it's so horrible, is it really an internet phone, or just an email phone? If you look at mobile internet usage, then the iPhone dominates already, and the rate of growth of mobile internet use is growing rapidly.

The bottom line, is that we need to segment the smartphone category because it makes sense, as there is a difference pre and post-iPhone.

As someone mentioned above, internet phones are replacements for a computer in many developing countries. I know, as I have a home in China. Everyone seems to have a cellphone, or at least half the 1.3Billion people do. Very few people have computers. DSL connections are lousy and slow. In fact, cell connections are more reliable. EDGE is fantastic, even in the countryside. 1/4 of the cellphone sales in China cost more than 500USD. They don't subsidize cells over there. Having an internet device that you can carry in your pocket is far more appealing in developing countries like China, than the idea of a laptop or desktop.