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iPhone's China Introduction to Boost Smartphone Market

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The arrival of Apple's iPhone in China is expected to help accelerate global shipment growth for smart phones in 2010 and 2011, according to iSuppli Corp.

Worldwide factory shipments of smart phones are expected to rise to 235.6 million units in 2010, up 27.9 percent from 184.2 million in 2009. Shipment growth will accelerate to 41.8 percent in 2011 to reach 334.1 million. This follows 2009 when growth is expected to slow to 11.6 percent, down from 20.6 percent in 2008, due to the global economic slowdown.

Although growth in the smart phone market is set to decelerate in 2009 compared to 2008, it still represents a rare bright spot for the troubled cell phone market. Global cell phone shipments are set to decline by 12.3 percent in 2009.

"China Unicom's move to start selling iPhones in China starting in the fourth quarter will sound the starting gun for China's smart phone market," said Tina Teng, senior analyst for iSuppli. "The arrival of the iPhone has compelled China Unicom's competitor China Mobile to introduce its own smart phone products and app store, helping to boost the market."

Smart phone shipments in China in 2010 will rise by 42.5 percent to reach 30.2 million units, up from 21.2 million in 2009, the fastest growth rate of any country tracked by iSuppli.

China will experience the strongest growth in smart-phone unit shipments of all global regions in the coming years. Shipments will rise at a 30.6 percent Compound Annual Growth Rate (CAGR) to reach 63.6 million units in 2013, up from 16.7 million in 2008.

The way for increased smart phone acceptance in China has been opened up by the deployment of 3G networks in the country.

Childhood's end

Another factor contributing to the success of smart phones is the newfound maturity of the product's supply chain throughout the world.

"The smart-phone market now has moved past the infancy stage and has entered a period that presents enormous growth opportunities for a number of key players, including device manufacturers, operators, semiconductor vendors, and platform providers," Teng said.

"There has been broad deployment of 3G networks worldwide, a proliferation of wireless broadband services and the rising availability of various multimedia applications for mobile devices. With all this in place, wireless network operators are expected to offer competitive data service plans and aggressive subsidies to reduce consumer smart phone prices. Furthermore, in encouraging customers to upgrade, wireless operators and handset brands are promoting the value smart phones deliver to consumers, rather than just playing up the hardware."

Smart-Phone Shipment Forecast

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