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iSuppli: Smartphone sales could grow 11% in 2009


iSuppli smartphone sales 2009There's good and slightly less good news for Apple (AAPL) in a report issued by iSuppli on Wednesday.

Against a backdrop of slowing sales growth in the overall mobile handset market, the El Segundo, Calif.-based research firm sees a bright spot in smartphones.

The report offers two scenarios for 2009 and beyond. Its best-case forecast calls for global smartphone unit shipments of 192.3 million units in 2009, up 11.1% from 173.6 million in 2008.

Its more pessimistic outlook calls for growth of only 6% this year, or 183.9 million units.

“For  the optimistic scenario to come to fruition, wireless network operators must cut fees for data services and offer aggressive subsidies to reduce consumer smart phone prices,” said Tina Teng, an iSuppli senior analyst. “Furthermore, wireless operators and handset brands have to sell consumers on the value of smart phones to encourage customers to upgrade."

For the pessimistic scenario to prevail, consumer confidence — and spending — just has to keep going the way it's headed.

iSuppli defines a smartphone by its high-level operating system, and includes phones that run Apple's iPhone OS, Microsoft's (MSFT) Windows Mobile, Nokia's (NOK) Symbian, Research in Motion's (RIMM) BlackBerry OS, Google's (GOOG) Android, Palm (PALM) OS and other Linux-based systems.

By this definition, iSuppli estimates that smartphone sales in 2009 will account for somewhere between 17.4% (optimistic scenario) and 16.6% (pessimistic) of the total handset market.

And what determines which brands do best?

"Applications are everything," according to iSuppli. “Beyond the friendliness of user interfaces, the availability of a variety of applications is the key factor attracting consumer interest to smart phone products,” writes Teng. “Thus, different players at various segments of the supply-chain are starting to build mini-ecosystems—including applications—in order to attract consumers and gain their loyalty."

Teng notes that Microsoft’s launch of MyPhone, Nokia’s Ovi and the Android Marketplace each represents a different approach to building these ecosystems.

What she doesn't mention is that Apple, with more than 20,000 apps and an installed base of better than 17 million iPhones, has a big head start.

See also:

The iPhone is better as long as you don't need to actually use it for business. I've had Palm/Treo, iPhone, and Blackberry and for sending/receiving e-mail, text messages, documents, etc. Blackberry is by far the most efficient.

Posted By Brian, Raleigh, NC: March 11, 2009 7:22 AM

The iPhone is better as long as you don't need to actually use it for business. I've had Palm/Treo, iPhone, and Blackberry and for sending/receiving e-mail, text messages, documents, etc. Blackberry is by far the most efficient.

Posted By Brian, Raleigh, NC: March 11, 2009 7:22 AM

I had a blackberry for 4 years and just bought an iphone. It's way better!!!

Yesterday I downloaded my first game, JigSee, which lets you take a picture from the iphone camera and then turns it into a jig saw puzzle, and the kids love it!!!

Posted By Iphone Mom, New York, NY: March 4, 2009 4:11 PM

I had a blackberry for 4 years and just bought an iphone. It's way better!!!

Yesterday I downloaded my first game, JigSee, which lets you take a picture from the iphone camera and then turns it into a jig saw puzzle, and the kids love it!!!

Posted By Iphone Mom, New York, NY: March 4, 2009 4:11 PM

The mobile operators really need to come up with an entry level data plan, so that smartphones become the standard phone for everyone.

I've heard limited data plans discussed, but perhaps they could come up with a tiered pricing scheme based on the data rate (like dialup vs ADSL data connections).

Posted By HereAndNow, Santa Clara, CA: March 4, 2009 1:42 PM

The mobile operators really need to come up with an entry level data plan, so that smartphones become the standard phone for everyone.

I've heard limited data plans discussed, but perhaps they could come up with a tiered pricing scheme based on the data rate (like dialup vs ADSL data connections).

Posted By HereAndNow, Santa Clara, CA: March 4, 2009 1:42 PM

Yeah, so the Curve is selling well. So was the Centro. Alot of new smartphone users will be attracted to price, as they can't differentiate what features are truly useful, being new, after all.

It's when these buyers look at their next smartphone, we'll see these users looking past price and to ACTUAL functionality. They'll realize that the phone is the smallest piece of the price puzzle. It's the subscription that is the most costly. They'll have learned what smartphone features they want, and don't want.

As for Frank's comment about TMo offering a $20 data plan, well, the original iPhone had a $20 data plan. I'm on it, and I'm using 3G! I got grandfathered under the old price, because my location didn't have 3G within 100 miles. Of course, now 3G is here, but I still pay just $20 for my data plan.

Posted By KenC, Gardiner, Maine: March 4, 2009 1:29 PM

Yeah, so the Curve is selling well. So was the Centro. Alot of new smartphone users will be attracted to price, as they can't differentiate what features are truly useful, being new, after all.

It's when these buyers look at their next smartphone, we'll see these users looking past price and to ACTUAL functionality. They'll realize that the phone is the smallest piece of the price puzzle. It's the subscription that is the most costly. They'll have learned what smartphone features they want, and don't want.

As for Frank's comment about TMo offering a $20 data plan, well, the original iPhone had a $20 data plan. I'm on it, and I'm using 3G! I got grandfathered under the old price, because my location didn't have 3G within 100 miles. Of course, now 3G is here, but I still pay just $20 for my data plan.

Posted By KenC, Gardiner, Maine: March 4, 2009 1:29 PM

And the Blackberry Curve has been the best selling smartphone for the past 3-4 months – why?

It's cheap! above all – users are fickle and whomever provides the best functionality and low price will win in the current financial climate. Expect Blackberry to sell more and more low end devices. They also benefit from being on every carrier and having a range of plan costs. I believe t-mo offers a data plan for $20 now.

Posted By Frank Castle, NY NY: March 4, 2009 11:31 AM

And the Blackberry Curve has been the best selling smartphone for the past 3-4 months – why?

It's cheap! above all – users are fickle and whomever provides the best functionality and low price will win in the current financial climate. Expect Blackberry to sell more and more low end devices. They also benefit from being on every carrier and having a range of plan costs. I believe t-mo offers a data plan for $20 now.

Posted By Frank Castle, NY NY: March 4, 2009 11:31 AM
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Philip Elmer-DeWitt

Philip Elmer-DeWitt
Steve Jobs, goes the old joke at Apple, is surrounded by a reality distortion field; get too close and you believe what he's saying. Apple has made believers out of millions of customers — and made a lot of investors rich — but Philip Elmer-DeWitt believes that an ounce of skepticism never hurts when writing about the company. He should know. He's been covering Apple – and watching Steve Jobs operate — since 1982.
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