Smartphones continue meteoric rise

Data from IMS Research reveals one in every two mobiles sold will be a smartphone by 2016

Sales of smartphones will smash through the 420m device mark in 2011, according to market watcher IMS Research.

The analyst firm claimed that smartphones will account for nearly 28 per cent of the total global handset market this year. As more affordable so-called entry-level smartphones enter the market, sales will surpass one billion devices by the end of 2016, equal to one of every two mobile handsets sold.

Josh Builta, analyst in IMS’ Mobile Technologies Group, said: "Despite the higher margins for smartphones, and the seemingly insatiable consumer appetite for converged devices, it is clear that not all OEMs are equally positioned to capitalise on this market trend.

"For instance, LG has offered a fairly limited smartphone portfolio in recent years despite being the third largest OEM in the world. This has resulted in the company reaching less than a three per cent share of the total smartphone market in 2010."

He added that the competitive environment has highlighted the "inability" of many traditional market leaders to recognise and adjust to the growing smartphone tier.

“The reasons for these failures include everything from poorly designed and manufactured devices, unsatisfactory user interfaces, and portfolios that don’t offer products with a differentiating feature. These lapses have created opportunities for newer entrants to the market, which they have aggressively pursued,” said Builta.

The most obvious of the new entrants is Apple, the analyst pointed out, but Builta was quick to note that it was not alone in its success. Samsung has increased its smartphone market share from three per cent in Q1 2010, to more than 13 per cent in Q1 2011, IMS said. Smaller and dedicated smartphone vendors such as HTC have also seen their position rise considerably.

"These companies are well positioned to benefit from the projected growth of the smartphone market in the future," he said. "Though the other OEMs are stepping up their efforts in the space, companies such as Apple, HTC and Samsung have a considerable amount of momentum. Catching them will not be an easy task."