Way back in 2004, Motorola’s RAZR kicked off a vogue for thin phones, but today skinny handsets are passé. The big trend in mobile phones: geeked-out smartphones with big screens, keyboards, email, and fast Web access.
The smartphone market will grow 50% to 60% annually in the next few years, Citigroup estimates today in a research report, while the overall handset market will grow just 11% this year and 9% next year. Citi expects smartphones to account for 22% of the handset market next year, almost triple its 8.5% share in 2006.
Obvious winners? In the U.S: Apple (AAPL) and its iPhones, and RIM (RIMM) and its BlackBerries. Abroad, the big winners will be Nokia (NOK), which commands 50% of the smartphone market worldwide (despite a measly presence in the U.S.), Taiwan’s HTC, which sells a variety of Windows Mobile phones and is one of Google’s Android handset partners, and Korea’s LG.
Microsoft (MSFT), whose mobile operating system looks prehistoric next to an iPhone, should double its Windows Mobile shipments to 20 million devices this year, Citi estimates — nothing to sneeze at. And chip firms like Texas Instruments (TXN), Broadcom (BRCM), Marvell (MRVL), and SanDisk (SNDK) should also benefit as smarter, more expensive phones take more market share.
Just as important: Wireless carriers like AT&T (T), Verizon Wireless (VZ, VOD), and Sprint Nextel (S) also gain a lot from increased smartphone adoption. Smartphone customers are more likely to subscribe to messaging, data, and Web services than “dumb” phone customers. And as the amount of money consumers spend on plain-vanilla mobile phone calls continues to fall, data service revenue will have to be one of the carriers’ main sources of growth.
See Also: Yahoo’s New/Old Mobile Strategy: Long Live The Deck
Smartphone Sales Jump, iPhone Grabs 27% Of Market
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