Developing markets will shape future smartphones

If the GSMA (Groupe Speciale Mobile Association), the mobile industry’s trade body, sees its predictions come to pass, by 2020 more than 80% of the anticipated nine billion mobile phone connections that will then exist will be from smartphones, and most of these will come from developing markets like those in Africa, South America and South East Asia.

Late last year the GSMA found that more than 50% of smartphones being sold were smartphones, rather than feature phones. Interestingly, in reaching this figure the GSMA didn’t measure device sales or shipments, but instead actual connections to mobile networks.

Also, the GSMA’s study deliberately excludes machine-to-machine (M2M) connections, like SIM cards in electric gates, industrial machinery or things like vending machines. The things being measured are restricted to mobile phones, dongles, tablet computers and portable modems, like Mi-Fi devices. This makes sense given the anticipated massive uptake of M2M connections that every technology analyst is predicting in the next few years.

According to the study, it’s cheap smartphones that are going to drive this trend. And by cheap, it means those around the R500 mark. The GSMA expects almost 630 million of these to come from China, almost 197 million from the US, a little shy of 142 million from Brazil and over 110 million from India.

Two thirds of the smartphones in circulation are already in the developing world, but the GSMA expects this will rise to four out of five. Curiously, although smartphone penetration in the Asia-Pacific region is less than 40% today, it nevertheless accounts for half of global smartphone connections. Chalk it up to population and a growing middle class.

Closer to home, smartphone penetration in sub-Saharan Africa is estimated at a paltry 15% today – but cheap devices are also changing that. In short, while smartphone uptake in the developed world is slowing – because most people have one – there’s still great growth to be had from the developing world.

“As the study released today shows, smartphones will be the driving force of mobile industry growth over the next six years, with one billion new smartphone connections expected over the next 18 months alone,” says Hyunmi Yang, chief strategy officer at the GSMA.

What’s the moral of the story? Device manufacturers should keep developing markets in mind when making new devices. Someone should probably tell that to Microsoft, which recently announced that the Nokia feature phone ranges like the Asha series’ days are numbered. This could be a boon for Asian device manufacturers like Xiaomi and Huawei. Let’s hope they’re paying attention.

Image By Omaranabulsi (Own work) [CC-BY-SA-3.0], via Wikimedia Commons