Smartphone Growth Expected To Increase

Smartphone Growth Expected To Increase

Smartphone Growth Expected To Increase

According to a recent release by research firm iSuppli Corp, global smartphone shipments are likely to increase 105% to 506 million units in 2014 from 246.9 million expected in 2010.

The research firm said that the smartphone unit shipment growth of 35.5% expected in 2010 will propel the mobile phone market. Overall mobile handsets are expected to grow 11.3%.

This growth will be fueled by new smartphones from large handheld device companies, such as Google Inc. (GOOG - Analyst Report), Microsoft Corp. (MSFT - Analyst Report), Nokia Corporation (NOK - Analyst Report) and Research in Motion Ltd (RIMM - Snapshot Report). While the wireless market is quite competitive, the rush in smartphone units indicates considerably higher growth potential for leaders such as Apple Inc. (AAPL - Analyst Report).

Apple has dominated the U.S. smartphone market and is expected to further strengthen its position through the launch of a fourth generation iPhone.

The new iPhone will be slimmer than the previous generation, with a higher resolution display and a front-facing camera for videoconferencing. The most important feature is its superior knack for multitasking, such as listening to music and simultaneously reading email via updated iPhone software (OS4).

The new iPhone is expected to be priced at $199, while the current iPhone 3GS is expected to see a price cut to $99. This could unquestionably drive higher demand for Apple's iPhones.

Overall iPhone unit sales were 8.75 million during the most recent quarter (second quarter of 2010), representing 131% unit growth over the year-ago quarter and the highest in the company's history. iPhone sales represented approximately 40% of the company's total revenue.

The increase was driven by intense international demand for the smartphone as well as the addition of new carriers in key overseas markets.

Apple's market share represents about 3% of the overall cell phone market, and ranked no. 6 according to iSuppli in the global cell phone market in the first quarter. Wall Street anticipates Apple to sell a total of about 36 million iPhones in its fiscal year ending 2010, which is a whopping 80% increase from over 20 million iPhones units sold in fiscal 2009.

Apple is expected to release the iPhone OS4 -- currently in beta testing -- which should further drive iPhone sales. Although AT&T Inc. (T - Analyst Report) remains the exclusive U.S. carrier for the iPhone, the company has been adding new mobile carriers to sell its products in other countries such as Vodafone (VOD - Analyst Report) in the U.K and Verizon Wireless (VZ - Analyst Report) in the U.S. The company has iPhone distribution agreements with 151 carriers in 88 countries.

Longer-term, it is believed that Apple's continuous effort to expand into international markets including China, its competitive pricing strategy and addition of new carriers will drive huge growth at Apple.

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