I know, I know, calling it “the year of the smartphone” is a total cliché, and for many of you, very, very late. Smartphones are omnipresent, and we here at Konrad Group know better than anyone that there isn’t much you can’t do with your phone these days. However, for some emerging economies, mobile’s potential is just beginning to be realized.
2001 is widely regarded as the year the smartphone made its debut. The Palm Kyocera 6035, the first smartphone in the United States, demonstrated that elements of a PDA operating system could be combined with the wildly popular mobility of a cellphone to tremendous effect—but not for everyone.
In 2007 Apple released the iPhone, the first smartphone to feature an entirely touch-based input method. The iPhone’s design and functionality heralded a paradigm shift in the mobile device industry. For the first time a smartphone had been built not for the corporate world, but for the average consumer. In the almost 6 years since the iPhone’s release, the developed world has seen smartphones become ubiquitous, and a huge amount of computing power has shifted into the hands of smartphone users. Finally, in 2013 we will see global shipments of smartphones outpace those of feature phones for the very first time. Sustained growth in the smartphone market will see 2013 as a seminal year. The growing populations of young, upwardly mobile workforces in emerging economies will rapidly become a significant population of smartphone users.
According to the International Data Corporation (IDC), in 2013 vendors will ship 918.6 million smartphones, or 50.1% of total mobile phone shipments. Furthermore, IDC forecasts that in 2017 1.5 billion smartphones will be shipped worldwide, equating to over two thirds the mobile phone forecast for the year, not to mention over 20% of the world’s population. Mature economies will make up a decreasing portion of this number, as more and more mobile phone users in these countries have already adopted smartphones. Currently, smartphone users constitute the majority of all mobile phone users in the United States. The balance of this growth, then, is expected to fall on China, Brazil, and India.
China’s “runaway train” pace—last year the country supplanted the US in global smartphone shipments—is not expected to continue, although there are drivers which will keep the market growing. It will instead be Brazil and India which will begin to dominate growth. In India, for example, in 2017 less than half of all phones imported will be smartphones, and yet it will be the world’s third largest market. Fast growing middle class populations which are increasingly turning in their feature phones for smartphones, as well as the groundwork that is being laid by wireless service providers and governments, is the key to this transition. Between 2013-2017, the number of units shipped to Brazil and India annually is expected to grow 129.4% and 459.7%, respectively. In China, the number is expected to grow 52.0% and in the United States, 33.1%.
These massive adoption rates are evidence not only of the increasing role these nations will play in the smartphone market, but in mobile innovation altogether. As apps and mobile software showcase and exploit what technology is able to deliver, the adoption will allow entrepreneurs and developers in these nations to explore opportunities previously inaccessible to them. Entrepreneurs and developers in North America and Europe will also be able to reach entirely new demographics. In fact, last year Brazil became the single largest app market in Latin America, while nine billion apps were also downloaded in India.
Not long ago NXTP Labs, a startup accelerator focused on Spanish-speaking Latin American technology companies, announced 18 new startups which will receive funding. They range in purpose from an activity discovery service in cities to a photo sharing service to a front-to-back mobile marketplace. These startups are symptomatic of Latin Americans’ acceptance of smartphones as platforms for innovation. It should not surprise us if a significant portion of the next decade’s innovation and entrepreneurial activity in the mobile market is driven by Brazil, China, and India.
So you may still think 2013 is a little late to be referred to as “the year of the smartphone.” Perhaps for some the year of the smartphone was the year of the iPhone’s debut, or the year Android and iOS each passed RIM in mobile operating system market share. Whatever your stance, one thing is undeniable, for two of the most populous and fastest growing nations on Earth, 2013 is just the beginning.