LONDON, UK: The market for Western European converged mobile devices (commonly referred to as smartphones) experienced a good performance in the last quarter of 2008. According to IDC's European Mobile Phone Tracker, vendors shipped 9.3 million units, 25.9 percent higher than the 7.4 million shipped in 4Q07.
For the full year 2008, vendors shipped 31.9 million units, 36.1 percent higher than the 23.5 million units shipped in 2007. Over the past few quarters, converged mobile devices have been experiencing higher growth rates than the overall mobile phone market. While the overall market saw a record fall of 13.5 percent during the last quarter of 2008, the converged mobile devices grew.
Several new converged mobile devices were launched in Western Europe in the last quarter of 2008. Among the most popular were the BlackBerry Storm, BlackBerry Bold, T-Mobile G1 (the first Android OS device) and the HTC Touch HD.
Some other devices launched on previous quarters ramped up for the sales season, becoming very popular as prices adjusted. Nokia E71, Sony Ericsson X1, iPhone 3G, and Samsung Omnia contributed to boost the sales of this segment among consumers.
Francisco Jeronimo, research manager, European Mobile Phone Devices and Trends, IDC, said: "The launch of iPhone 3G last year attracted consumer attention to this segment in Western Europe. Since then these devices have been seen as personal devices rather than just professional devices. The good performance of this segment is a very good sign of opportunities from which vendors and operators could profit in light of the slowdown in the overall mobile phones market. Every economic crisis culminates in lower consumer spending to some extent, but is this market fall a consequence of less money or simply because devices are no longer attractive enough to keep replacement rates high?"
"Mobile phone manufacturers have been focusing on the latest technology trends. Feature phones were the latest big wave and the tech-races started. Manufacturers ranked themselves with the highest megapixel cameras, the biggest displays, the latest processors, GPS-enabled devices, and so on and so forth. But are 12 megapixel cameras exciting enough to drive replacements when users are concerned about the economic situation? And from an operator's perspective, are those devices generating more revenues?
"During economic slowdowns operators and consumers become more conscious about what they purchase. Consumers are more careful when it comes to replacing their handsets. If a good value proposition is not presented, they postpone their buying decisions. On the other hand, operators need to drive replacements throughout handsets that allow new services and generate new revenues."
In mature markets like Western Europe, consumers find data access a key requirement on their devices, either for Internet access, push email, IM, social networking, PIM, or specific enterprise-related applications. Consequently converged devices that run high-level operating systems are replacing feature phones (running proprietary and closed operating systems). In the last quarter of 2008 datacentric devices grew 94 percent year-on-year, contrasting with the 21 percent decline of the voice-centric devices.
"We believe that feature phones will decline in the coming years and will be replaced by converged mobile devices. Manufacturers and operators are working closely to bring down the price of operating systems to be able to introduce more affordable converged mobile devices. The market is heading towards operating systems that allow third-party applications, can run independently of the operator's network, and can run several applications concurrently," said Jeronimo.
The current economic situation has proved that even the mobile phone market is not immune to recession. Nevertheless, in particularly difficult economic situations, vendors and operators can find good opportunities to increase their businesses. The converged mobile device (or smartphone) segment has shown that when the right needs are identified and valued-added products and services are presented, consumers will continue to replace their devices and maintain expenditure on communications when they perceive that value for money.
