Smartphone sales in Latin America are expected to represent more than 4% of total unit handset sales in 2009 - at least double the percentage seen in 2007, mobility analyst with consultancy Gartner, Tuong Nguyen, told BNamericas.
Total handset units sold in 2008 will be in the mid-140mn range. That will decline to the low 140mn range in 2009 and increase slightly in 2010 but not return to levels seen in 2008, according to Gartner.
In terms of total handset revenues, smartphones are expected to represent about 7% in 2008 compared to less than 6% in 2007, and expected to rise to around 10% in 2009.
Nguyen pointed out that the smartphone market is still incipient in Latin America but is growing fast as operators strive to target the higher ARPU segments and drive data usage.
As penetration rises and there become fewer first time mobile users in Latin America, operators are focusing on the higher end of the pyramid.
That said, a number of manufacturers recently introduced more general consumer-oriented phones. For example BlackBerry has diversified from its exclusive enterprise focus and is targeting a wider audience with the Pearl and Curve devices, while the Apple iPhone has also drawn attention to smartphones.
Another driver is that smartphone prices have progressively dropped. This is partly because a few manufacturers are making smartphones in the region, which eliminates import taxes that drive up the price for the end-consumer.
Gartner published its outlook for the smartphone market on December 4, reporting that smartphone sales grew 56% in the third quarter of 2008 in Latin America, outstripping the global growth rate of 11.5%.
Worldwide smartphone sales to end-users totaled 36.5mn units in the quarter.
Nguyen said that the strong growth in Latin America was due to the region growing from a much lower level of penetration than Western Europe and North America.
"It's pretty straightforward math. When you go from one to two, that's 100% growth, from two to three is 50% growth, and from three to four, that's about 33% growth and that's largely what you're seeing in Latin America," Nguyen said.
"The market is just so small that you're seeing this huge year-over-year growth. And we still expect it to grow fairly significantly over the next few years," Nguyen added.
Gartner analyst Roberta Cozza was quoted in the outlook as saying that the current economic climate is negatively impacting sales of higher end devices.
"Going forward, we should expect the smartphone device market to continue to grow but at a slower pace. Although leading mobile operators are subsidizing more smartphones, to reach lower prices they tie the device to two year contracts with monthly data plan rates which remain too expensive for the mainstream user," Cozza said.
Nokia (NYSE: NOK) maintained its number 1 position worldwide with 42.4% market share in the third quarter of 2008, but for the first time it recorded a decline in sales, slipping 3% year-on-year.
Nokia said on December 4 that it was revising its outlook for the fourth quarter and for 2009 as the mobile device market slowdown has continued more rapidly than previously accounted for in an update issued on November 14.
"The industry continues to be impacted by the effects of a global consumer pull-back in spending, currency volatility, and decreased availability of credit," Nokia said in a statement.
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