Trend alert: Smartphones continue their explosive growth

Anita Moorthy, Senior Director of Product Marketing

LOS ANGELES, CA March 17, 2011 – While feature phones still make up a significant chunk of the handsets in use worldwide, adoption of smartphones − that is, advanced mobile phones that can surf the Web and download apps − continues to grow at an explosive rate.

Research firm IDC forecasts that the smartphone market is expected to grow close to 50 percent worldwide this year as consumers and enterprise users alike upgrade to smartphones.

This year alone, smartphone manufacturers will distribute 450 million smartphones, versus 303.4 million units shipped in 2010, per IDC.

The firm predicts that the smartphone market will grow more than four times faster than the overall mobile phone market.

ABI research is forecasting a 19 percent compound annual growth rate (CAGR) from this year through 2016.

It won’t be long before the smartphone will be the new feature phone in markets such as North America, Western Europe and parts of Asia.

But which smartphones will win out? There is a war raging among competing operating systems and handset manufacturers for market share.

Google’s Android will surge into the lead among smartphone OSs after achieving the No. 2 spot in 2010, according to IDC.

Handset vendors that embraced Android saw that strategy pay dividends last year. Samsung, Motorola and HTC are all enjoying robust sales of Android-based devices.

Nokia, while still the No. 1 handset manufacturer worldwide, has had difficulty cracking the North American market. It is teaming up with Microsoft and is shift from Symbian to Windows Phone 7.

Microsoft had been losing market share leading up to its partnership with Nokia. Both giants are hoping that the first Nokia devices running WP7, which are expected to debut in 2012., will make a bit impact.

IDC, for one, is optimistic about the prospects for the partnership. By 2015, the firm expects Windows Phone to be the No. 2 OS worldwide behind Android.

More than 69 million Android-based smartphones shipped last year, according to ABI Research, which forecasts that in 2016 Android will have around 45 percent of the market.

Apple’s iOS had 15 percent market share last year, and ABI is projecting continued steady growth until it reaches 19 percent global market share in 2016.

Research In Motion’s BlackBerry had 16 percent of the market in 2010, and ABI expects it to slip back gradually to 14 percent market share in 2016.

ABI is less optimistic about the Microsoft/Nokia alliance. Windows Phone 7 did ship 2 million handsets in the fourth quarter of 2010, but the research firm believes it will be difficult for the WP7 OS to surpass 7 percent of the market by 2016.

Wild cards that could skew the equation include HP’s Palm WebOS and Samsung’s Bada.

Brands, publishers, media companies and retailers should all monitor these figures in the markets in which they operate to decide on which platforms to develop and advertise. Of course, the advantage of the mobile Web is that all of these devices can access it.