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2009: Year Of Recession Resistant Smart Phones?

 February 03, 2009 07:22 AM

Smart phone market is expected to grow at a healthy pace, despite slumping demand for mobile handsets amid worsening economic crisis.

In a report, titled "Mobile Devices Market Sizing And Share," market research firm ABI says that more than 171 million smart phones were shipped in 2008 compared to 116 million shipped in 2007. The report says that smart phones accounted for 14 percent of all cell phones shipped in 2008. ABI noted that the sales are expected to grow 18% to 203 million 2009 as operators seek to sell lure users with aggressive strategies. Strategy Analytics estimates that smartphone shipments will total 177.2 million in 2009. Juniper Research forecasts that annual sales of smart phones will rise by some 95 percent to more than 300 million between now and 2013. The report says that by 2013 at least 23 percent of all new mobile phones will actually be smart phones.

"What is certain is that handset vendors will be trying to convince everyone they should own a smartphone," said Jake Saunders, Asia-Pacific VP of ABI Research, in a statement. "Welcome to the year of the smartphone."

According to Comscore, from October 2007 to October 2008, marketshare of smart phones climbed from 5 percent to 10 percent of U.S. cell phones. Strategy Analytics forecasts that by 2012, smart phones will dominate 30 percent of US cell phone market.

Nokia (NYSE: NOK) retained its position of market leader in 2008 with a marketshare of 38.6%, according to ABI. Thanks to N Series and 5800 smart phones, Nokia is expected to maintain its leadership in 2009 as well. However, its relatively small presence in a high growth market like Unites States may not bode well for the smart phone maker.

Samsung, with its Omnia handset grabbed the second spot. The Korean handset maker's market share grew 2.7% to 16.2% in 2008, making it the largest gainer in the category. It was followed by LG Electronics, which secured a market share of 8.3 percent.

Sony (NYSE: SNE) Ericsson saw a contraction of 0.7% in market share in 2008 but still managed to finish fourth. However ABI insists that the launch of Experia 1X in fourth quarter and related smartphone products could help the firm improve its market share in 2009.

Research In Motion (NASDAQ: RIMM), with a market share of 2%, is expected to emerge stronger in coming days, as BlackBerry Bold and Storm are likely to attract new buyers. Apple (NASDAQ: AAPL), which entered the market only two years back, has captured 1.1% of the global market. The iPhone 3G has been received quite well by the users. Industry watchers now predict that Apple could ring out launch another model this year to increase its market share.

Motorola (NYSE: MOT), continued to suffer in 2008 as well. The US based handset maker's marketshare slid 5.1% to 8.3% last year. Earlier, in 2007, Motorola had suffered a drop of 7.8%.  "It will be a tough year for Motorola, but it needs to deliver handsets that draw back the once-faithful Motorola purchaser before it is truly too late," the report said. "The challenge is that purchasers in 2009 will be very, very picky."

Meanwhile, the smartphone space is expected to become more competitive with pc maker Dell (NASDAQ: DELL) reportedly working on smartphone that could be released as early as this month.  

Disclosure: Author does not own any of the stocks discussed here.


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