Smartphone sales to surge in Asia Pacific

24 August 2010

SINGAPORE: Smartphone sales will increase dramatically in Asia Pacific in the next five years due to "skyrocketing" demand from consumers in the region.

According to a forecast from Frost & Sullivan, the research firm, gadgets like Apple's iPhone and China Mobile's OPhone are set to make up 54% of APAC handset sales by 2015.

This compares with the total of just 5% at present, and will result in 477m devices being sold in the region at the mid-point of the decade.

Shipments are rising in all nations, with developed markets such as Japan and South Korea leading the charge as operators in less established economies switch from 2G to 3G.

Marc Einstein, an industry manager at Frost & Sullivan, suggested that the average revenue per user typically climbed between 25% and 100% when subscribers traded up.

"The Asia Pacific market is particularly interesting for smartphones as there has been significant uptake in emerging markets like China, India and Indonesia, even among prepaid users," added Einstein.

Incremental data usage via smartphones should generate returns of $38bn for operators in Asia Pacific in 2015, measured against $1.3bn in 2009.

However, while Research in Motion's BlackBerry and the portfolio of handsets offered by companies such as Samsung and HTC are commanding attention, substantial obstacles need to be overcome.

For example, 80% of the wireless audience in the region currently utilise prepaid cards, reaching 97% in certain countries, making "smartphone subsidies impossible for most users".

Other challenges include an absence of public Wi-Fi, especially in developing nations, which has proved to be a "smartphone saviour" in the US.

"Only the most developing markets are seeing double-digit increases in device sales, and with flat or negative growth in many markets, smartphone sales are filling in this gap," Einstein concluded.

Data sourced from Frost & Sullivan; additional content by Warc staff