Smartphone sales to reach 1bn a year by 2016

20 Jul 2011

Sales of smartphone devices will reach 1bn per annum by 2016, up from 302m in 2010. According to Juniper Research, the best opportunities for new players are economy devices that cost less than US$150 unsubsidised.

Smartphones will make up the majority of shipments in five years’ time, as this type of device becomes available at lower price points.

Competition amongst vendors offering premium smartphones is intense, and so Juniper believes the best opportunity for new players is through economy models (those with an unsubsidised retail value of US$150 or less).

“In developed markets, many consumers will want to upgrade from a feature phone to a smartphone, but still pay a feature phone price,” Daniel Ashdown, the report’s author, explained.

“In emerging markets though, lower average consumer spending power and lack of operator subsidies will make a low price point essential,” Ashdown said.

Juniper predicts that open-source operating systems – predominantly Android – combined with the falling cost of key components will make this possible.

However, the market for standard smartphones (US$151-US$399) and premium smartphones (US$400 and above), such as the Apple iPhone, will remain robust.

This will be driven by the kind of new technologies arriving on these devices – including NFC, 3D and biometrics.

As we are already seeing with the Sony Ericsson Xperia Play, which borrows heavily from the PlayStation experience, features of other devices that will continue to be integrated into smartphones, including gamepads.

And, as we’ve seen with the Samsung Galaxy Tab, smartphones are reaching the market which can morph into other devices – notably tablets and netbooks.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years