Smartphones shipped globally will hit 1.7 billion in 2017 with emerging markets seeing particularly strong growth, Ovum has predicted. According to the independent telecom analysis firm, application stores are also gaining ground in emerging markets resulting from the increased smartphone penetration as users seek richer experiences on their mobile devices.
Worldwide, 450 million smartphones were sold in 2011, of which around 160 million were sold in emerging markets. China alone accounted for around 66% of the smartphones sold in emerging markets, and Ovum estimates that smartphone shipments could reach nearly 57% of all devices sold in emerging markets by 2017.
In emerging countries around the world, increasing smartphone penetration, mobile broadband, and the ongoing reduction of service and device prices has translated into expanded use of mobile applications. And as more apps are downloaded, subscribers are driving network traffic growth.
As noted by Richard Hurst, Ovum’s senior analyst of telecoms in emerging markets, smartphone penetration in emerging markets is expected to dramatically increase starting in 2013, and this will have a significant impact on the app store dynamic.
Smartphone penetration will be boosted further when the devices become cheaper. Although affordability remains a big issue in most emerging markets, a nascent entry-level segment is taking shape in the sub-U.S.$100 price band, such as some low-cost Android, RIM and Nokia devices.
Hurst added that device and OS vendors will look to establish themselves as leading providers of apps in emerging markets, emulating the position they occupy in developed markets. “However, in countries such as China, India, Brazil and South Africa, MNOs with strong app store propositions will fight to defend their positions,” he said.
Smartphone users are attractive targets for emerging market operators as they are early adopters and typically have a higher disposable income than average consumers. On the carrier side, operator subsidies for smartphones are uncommon in emerging markets, and this has hampered device adoption.
Shiv Putcha, Ovum’s principal analyst for emerging markets, commented that the growth of smartphones in emerging markets will cause a corresponding growth in online services such as cloud, storage and purchasing based on mobile money transactions. OEMs and equipment vendors will also increase their presence in online services.