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Smartphone growth silver lining for mobile handsets in 2009

Shipments of smartphones grew 15% year over year in 2009, marking one of the few positive trends in what was otherwise a difficult year for the mobile handset industry, according to a new study from IMS Research.

The growth in the smartphone segment stands in stark contrast to an estimated contraction of 7.9% in total handset shipments for the year. That disparity highlights an evolving trend in consumer preference, according to IMS Research analyst, Chris Schreck. "Last year validated the idea that the target market for smartphones is expanding rapidly. Increasingly, consumers who purchase a new handset are choosing a smartphone. The notion that smartphones are exclusively luxury purchases or enterprise tools is rapidly giving way to a perception of smartphones as a device with mass market appeal." This phenomenon proved especially true in North America and Western Europe, where smartphone shipment growth was strong despite grim expectations reported at the outset of 2009.

There are a number of market dynamics that contributed to the resilience of the smartphone segment. "The effort from handset OEMs to broaden the appeal of their smartphone portfolio and expanded offerings from mobile content suppliers resulted in an incredible level of innovation in 2009, particularly in the smartphone space," continued Schreck. "Between Android's increased market presence, faster processor speeds, more advanced displays, and increasingly sophisticated user interfaces, the gap between many of 2009's devices and those released in the previous year was noticeably vast. There were a number of devices in 2009 that proved difficult for consumers to pass up. And for their part, mobile network operators helped fuel smartphone growth with competitive subsidies and aggressively priced data plans."

Smartphone shipment growth is expected to accelerate in the future, with IMS Research projecting a CAGR of 24.5% between 2010 and 2015. Much of this growth is forecast to come at the expense of the feature phone segment, as the average selling price for entry level smartphones approaches the same levels as high end feature phones.

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