Smartphone Market To Grow Despite Economy

Apple and RIM are expected to take advantage of the increased adoption of smartphones, according to ABI Research.

BlackBerry Storm
(click image for larger view)

BlackBerry Storm

The mobile market wasn't able to escape the faltering economy as many cell phone companies had a poor fourth quarter. Most companies and industry watchers are expecting a contraction in the overall market in 2009, but ABI Research said the smartphone segment will still have strong growth.

The report, titled "Mobile Devices Market Sizing And Share," said more than 171 million smartphones were shipped last year, and that figure will grow as wireless operators seek to sell more data plans and manufacturers seek higher margins.

"What is certain is that handset vendors will be trying to convince everyone they should own a smartphone," said Jake Saunders, Asia-Pacific VP of ABI Research, in a statement. "Welcome to the year of the smartphone."

Nokia continued to dominate the field, as ABI said it finished 2008 with about 38.6% of the market. With its N Series and the popular 5800, Nokia is well-positioned to maintain its lead. But Nokia is vulnerable because of its somewhat small presence in the United States, which is expected to become the largest smartphone market eventually.

Driven by the success of the touch-screen Omnia, Samsung was in second place with 16.2%. This was followed by LG Electronics, which had 8.3% of the market thanks to increased traction in the U.S. market.

The biggest loser of the year was Motorola, ABI said, as the company lost 5% market share. The company is hoping new CEO Sanjay Jha can help mount a comeback, and Motorola is placing large bets on Android-powered smartphones. "It will be a tough year for Motorola, but it needs to deliver handsets that draw back the once-faithful Motorola purchaser before it is truly too late," the report said. "The challenge is that purchasers in 2009 will be very, very picky."

Sony Ericsson is expecting some tough business months ahead, but it still claimed 8% of the market. The Xperia X1 has sold well and it may give the company a boost, ABI said. Sony Ericsson also recently joined the Open Handset Alliance, and it could release an Android smartphone this year.

Research In Motion and Apple hold a relatively small amount of the market, but ABI said both are in good positions to capitalize on increased adoption of smartphones. RIM holds about 2% of the entire market, and handsets like the BlackBerry Bold and Storm will make it a strong player with the enterprise and prosumer buyers. Apple has grabbed 1.1% of the global market, which is quite a feat considering it entered the space less than two years ago. The iPhone 3G continues to sell well, and analysts predict Apple could bring out another model this year to further boost sales.

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