Given the growing interest by operators in smartphones, intensified competition among vendors, and the greater potential for growth in Latin America compared with other regions, the region's smartphone segment will represent an opportunity of 150 million handset units over the next five years -- 48 million handsets units in 2014 alone, according to a new report from Pyramid Research.
The smartphone segment will become one of the most important sources of data revenue growth over the next five years in Latin America, notes Omar Salvador, Senior Analyst at Pyramid and author of the report. "The market is still in its infancy, representing only 3 percent of total handset unit sales in 2008; globally the figure was 12 percent," he says. "However, Pyramid predicts the segment will grow from 7 million smartphones sold in 2009, representing 5.4 percent of total handsets sales, to 48 million in 2014, or 30 percent of the total," he adds.
"Given that Latin America's mobile subscriber growth rate declined from 24 percent in 2007 to 19 percent in 2008, operators are more interested than ever in increasing their ARPS and encouraging smartphone uptake is an excellent approach to reaching that goal," Salvador says. "Vivo, the leading player in Brazil, recently highlighted how crucial the smartphone base is to its data revenue growth, while smartphone vendors are stepping up competition in the region with aggressive tactics, including handset bundles, new models, expanded entry-level portfolios, and close cooperation with operators," he adds.
If competition intensifies among vendors and operators, service bundling becomes more aggressive, the prices of entry-level smartphones fall below $100, and touchscreen phones become available in the midlevel price category, Pyramid believes smartphones can capture up to 39 percent of total handsets sales in 2014. "These growth drivers, supported by the growing 3G availability in Latin America, will push the Latin American smartphone market up toward the global average of smartphone handsets as a percentage of total handset sales," concludes Salvador.
Posted to the site on 2nd July 2009
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