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Segmentation Possibilities in the Smartphone Sector

In a previous blog, I claimed that 2009 was the year of the smartphone. Well if that was the case, then 2010 is the breakout year in which we are starting to see the smartphone category itself start to segment. Iconic high-end smartphones such as HTC’s Evo and Incredible and Apple’s iPhone 4 are all selling well.

Now we are starting to see smartphones hit the prepaid market, with a great example being ZTE’s recent announcement of the Android-based Racer phone that will sell in the UK for sub £100 — without the need for a contract.

Consumer demand for smartphones is helping drive the success of the mobile Internet. Wider 3G network coverage, the availability of handsets with GHz processors and state-of-the-art OS/UI, along with the growing variety of mobile apps and services are all factors driving this unprecedented growth. The combination of these underlying factors is forming a perfect storm to further drive smartphone growth in 2010.

Innovation and traction are happening on multiple fronts:

  • Android’s open source and user friendly UI are well received by developers, OEMs and operators. Google announced in June that 160,000 Android-based devices are activated each day, up from 100,000 per day in May.
  • Momentum is gaining behind Windows Phone 7, featuring a very integrated user experience and targeted for launch before the end of 2010. By the way, Microsoft chose Qualcomm’s Snapdragon platform as the reference design to optimize Windows Phone 7 software. So all Window Phone 7 Smartphones launched this year will be Snapdragon-based.
  • Qualcomm’s Brew Mobile Platform (Brew MP™) will enable mass market phones to have smartphone like capability, so consumers can get push emails, check social networks and download third party apps — even with lower priced devices. Brew MP is gaining traction with support from operators such as China Telecom, Korea Telecom and America Movil. And earlier this year, AT&T stated that 90% of its Quick Messaging Devices will be based on Brew MP by 2011.

According to some industry analysts, one in every five phones sold globally in 2010 will be a smartphone and that number is expected to increase to one in every three phones by 2012. These forecasts were done several months ago, and based on the continued consumer uptake and penetration into the prepaid segment, these figures may prove to be conservative.

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