Smartphone Sector Exploding, Analysts Say

Gretchen Gallen
SCOTTSDALE, Ariz. – The smartphone mobile craze is about to balloon, said market research firm In-Stat/MDR in a recent study, pointing to the smartphone as the next cash cow for content and software providers.

Formerly dogged by battery life issues, high prices and security problems, a new breed of smartphones is being heralded as the next hot tech sector craze as users migrate away from the personal computer toward mobile devices that can operate similar programs and provide better integration of voice and data.

After several years of slow adoption rates, shipments of smartphones are expected to rise by almost 50 percent over the next five years. In-Stat/MDR predicts that smartphones will likely take market share in the mobile sector because of their ability to combine email, multimedia messaging, camera, games, video and a music player all in one device.

The InStat/MDR report estimates that smartphones will account for some 117 million out of 833 million handsets shipped globally by 2009. The report also said that smartphones using the Symbian operating system will dominate the market, with Microsoft's mobile platform trailing behind in second place.

According to Scottsdale, Arizona-based In-Stat/MDR, the breakout period for an uptick in the sales and usage of smartphones is still a year away. Increasingly, the demand for more sophisticated mobile technology could soon eclipse the PC industry and open the door to a thriving new content distribution outlet for many industries, including adult.

“This doesn’t mean that this year is not an important one," said Neil Strother, a senior analyst with In-Stat/MDR. "As this segment builds there are many things worth knowing in order to take advantage of these business opportunities.”

Strother added that the smartphone's best days are just around the corner. "We are starting to see the beginning of their mainstream adoption."

Among the devices leading the sector are SonyEricsson P900, Orange E200, XDA II and Nokia 6600, which all typically offer more features than competitors. However, at present, only 9 percent of mobile users own smartphones.

In addition, In-Stat/MDR reported that the Wi-Fi market is booming and that wireless hardware swelled to a $1 billion industry by the end of 2003 and is expected to continue a steady rise over the next five years.

The sale of PCs, PDAs and phones are slated for a 66.2 percent leap, accounting for an estimated 226 million units shipped by 2008.