The smartphone revolution
Clearly, we like smartphones a lot. The quick and dirty definition of a smartphone, as opposed to any other mobile phone, is that it runs an operating system that facilitates applications such as a word processor, and has a Qwerty keyboard.
Smartphone sales increased worldwide by 27% in the second quarter of 2009—easily outstripping the sales performance of other mobile phones and behaving generally as though there were no recession at all.
Worldwide, mobile phone sales dropped by 6% whereas smartphones sales shot up, gobbling up 14% of the market—an increase of 4% from 2008, according to market research firm Gartner.
And as smartphone prices fall, this market share will only increase, says Gartner’s vice-president, Nick Jones, who predicts that in markets such as Western Europe 80% of handsets shipped by 2013 will be smartphones.
Smartphones are doing so well because their features no longer provide an incentive to upgrade, says Arthur Goldstuck, the MD of World Wide Worx. ‘People would rather stick with an older phone than incur a cost to buy a new phone that does not do much more than the old one.”
There is no standard industry definition of what a smartphone is. ‘In our current Mobility 2009 study we found that most consumers and business owners did not know what a smartphone was,”
Goldstuck says. ‘The definition we developed was a cellphone that has an operating system that can be enhanced or upgraded.” What that comes down to, he says, is that these phones use mobile versions of applications such as spreadsheets and word processors, or can download internet applications.
The momentum of Nokia, the smartphone market leader thus far, has stalled, says Boston-based tech consultants Strategy Analytics: its share of the global smartphone market dropped from 49% in 2007 to 37% in the first quarter of 2009.
Research in Motion (RIM), which makes Blackberry, has boosted its share from 10% to 20% over the same period. ‘The BlackBerry brand has enjoyed robust growth across the business and consumer markets in sub-Saharan Africa over the past two years,” says RIM’s regional director for sub-Saharan Africa, Deon Liebenberg.
A stroll through Pretoria’s Menlyn Park shopping mall on a Saturday afternoon provides evidence of BlackBerry’s surge in popularity. It’s not only car keys that shoppers swing openly as they stroll through the mall: their BlackBerrys are visible as well.
BlackBerry owner Sameer Parker, a marketing consultant, says the phones have become a status thing. But despite the fashion hype, he says his BlackBerry Pearl has made his life easier.
Now his email comes right to his phone. ‘Blackberry was the first phone with a Qwerty keyboard, so I can type a really long email with both hands and it doesn’t take long,” he says.
In Fortune magazine’s ‘100 fastest growing companies” list, RIM ranks first—a position Fortune attributes directly to the rise in the popularity of its BlackBerry handsets; RIM’s profits have grown 84% over the past three years and its revenues by 77%.
Smartphones offer an easier and faster option of accessing the internet, says Julie Tomlinson, the managing director of Sybase South Africa. ‘I’ve been in meetings where we are debating something and someone quickly goes on the internet to get the answer,” she adds.
Goldstuck predicts a bright future for smartphones. ‘We can expect better browsing, better integration of internet applications and more efficient versions of Office applications.”
But the most important developments will be instant messaging across platforms, as well as voice-over-internet protocol right on your phone. Goldstuck says this will gradually erode both SMS and voice revenue for the networks—sparking a new era of cellular wars.