Frost & Sullivan: Smartphones Drive Asia-Pacific Device Sales

Growth in the Asia-Pacific smartphone market is expected to skyrocket in the coming years and by 2015, Frost & Sullivan forecasts that 54 percent of all devices sold in the region will be smartphones, up from only five percent in 2009.

Smartphone sales in Asia-Pacific are rapidly increasing in all markets, as developed markets like Japan and South Korea are switching from feature phones to smartphones, while operators in emerging markets are pushing smartphones to entice users to upgrade from 2G to 3G service, according to the new analysis from Frost & Sullivan entitled "2010 Asia-Pacific Mobile Device & Smartphone Outlook."

"Smartphones are critical to every operator’s mobile broadband business case, as a smartphone user’s ARPU (average revenue per user) typically increased by 25 to 100 percent after adoption depending on the market," said Frost & Sullivan industry manager Marc Einstein, in a statement.

The research finds that the incremental data usage from smartphones will generate over US $38 billion for operators in the Asia-Pacific region (18 Asia-Pac countries, including Japan), up from just over US $1.3 billion in 2009.

Despite the massive growth in smartphone sales, there are still many factors impeding sale of the device in many markets. According to Einstein, "Eighty percent of Asian mobile users use prepaid cards, and in fact in many markets are as high as 97 percent, making smartphone subsidies impossible for most users. Furthermore, there is a lack of public Wi-Fi, particularly in emerging markets which has been a smartphone saviour in the USA and other developed markets."

Smartphone sales are also particularly important for vendors as the total market for device sales is stagnant in most markets.

"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 said.

He estimates 477 million units of smartphones will be sold in Asia-Pacific in 2015.