For a short while, smartphones appeared to have it all their own way in the mobile device market. The arrival of sleek, multi-functional, touch-screen handsets largely kicked feature phones into touch, as consumers and businesspeople realised they could do more with the latest generation of mobile devices. Smartphone sales soared, condemning many other earlier phone models to early obsolescence. But then innovation never ceases, and the arrival of the media tablet has provided smartphones with their own challenge. With portability now aligned with a larger screen, the limitations of smaller devices have been brought into sharper focus.
Millions of tablets have been purchased over the last 12 months, with the iPad, Galaxy and various other models flying off the shelves. But interestingly, despite the increased competitive pressure they face, smartphone sales also continued to rise at a rapid rate during this period. According to a latest forecast from IT analyst Ovum, global shipments are now expected to reach 653 million in 2011, as companies and individual consumers continue to invest in handsets. By 2016, Ovum expects customers in the Asia-Pacific region to be purchasing 200 million units per year. Western Europe and North America are also forecast to remain strong markets with 175 million and 165 million shipments respectively per annum.
Principal analyst Adam Leach said the smartphone market will continue to outperform the wider mobile phone market over the next five years, but the most interesting development will be the "dramatic shifts" in dominance for smartphone software platforms. Unlike in the tablet market – where the iPad has proved itself the dominant force - Apple continues to see its efforts eclipsed by a rival firm. Ovum explained that the Android operating system (OS) in particular is playing an important role in driving the expansion of the smartphone market. Despite the usability and familiarity of Apple and Microsoft platforms, and the sizeable clout of the two software giants, Android is the OS users have taken most to their hearts. It has emerged as the dominant industry presence with a huge 20.5 per cent lead over Apple iOS in terms of market share.
Within five years, 38 per cent of smartphone purchases will be for devices running on the Android operating system, with Apple iOS accounting for just 17.5 per cent of the market. Windows Phone is expected to command a 17.2 per cent market share by 2016, followed by BlackBerry OS with 16.5 per cent. Mr Leach explained that the wider availability of Android to manufacturers is helping the operating system to outperform its rivals. "The success of the Android platform is being driven by the sheer number of hardware vendors supporting it at both the high and low ends of the market," he stated. But equally, the high degree of functionality and ease of use associated with Android are just as crucial to its current success.
However, Mr Leach warned that Android will not have its own way indefinitely. "We expect at least one other platform to achieve mainstream success within the forecast period," he commented. "This could be an existing player in the market such as Bada, WebOS, or MeeGo, or it could be a new entrant to the market place." In addition, he noted that the recent partnership between Nokia and Microsoft will see more handsets run on Windows Phone in the future. Symbian is likely to see a marked decline in popularity as a result, with Microsoft hoping to claim its share of the market.
From a business perspective, high levels of competition between OS developers and smartphone manufacturers can only be a good thing. The ongoing battle between developers can only lead to greater innovation, initially in terms of new applications and then, upgraded operating systems and devices. Smartphone sales figures evidence the fact that businesses and consumers are looking to buy devices, and they obviously want maximum value for their investment. As shipments continue to rise, the incentive to release new applications increases and, in turn, so does the appeal of the devices to the customer.
IT analyst Gartner explained that as competition increases in the market, and manufacturers go to greater lengths to promote their products, prices will inevitably decrease. Roberta Cozza, principal analyst at the firm, predicted that by 2015, 67 per cent of all open OS devices will have an average selling price of $300 (£183) or below. "As vendors delivering Android-based devices continue to fight for market share, price will decrease to further benefit consumers", she said. "Android's position at the high end of the market will remain strong, but its greatest volume opportunity in the longer term will be in the mid- to low-cost smartphones, above all in emerging markets."
The industry experts clearly believe that the future is bright for smartphones. But does this fail to account for the unstoppable tablet computer juggernaut? Well seemingly not. According to Ms Cozza, there is a two-way pull between tablets and smartphones, allowing both markets to thrive side-by-side. Users are finding that smartphones and tablets complement each other, especially when they have the same OS for each, she noted. "This allows consumers to be able to share the same experience across devices as well as apps, settings or game scores," Ms Cozza stated. "Tablet users who don't own a smartphone could be prompted to adopt one to be able to share the experience they have on their tablets."