Smartphone sales up 96% but still trail feature phones

ATLANTA - Around the world, smartphones are gaining ground fast. But they’re not yet the norm. New statistics from Gartner, looked at recent sales of new phones. In the third quarter of 2010, 417 million new handsets were sold -- up 35 percent from third quarter 2009. Within these new phone sales, “smartphone sales grew 96 percent from the third quarter last year, and smartphones accounted for 19.3 percent of overall mobile phone sales in the third quarter of 2010,” Gartner said in a press release.That sounds like a big deal, and indeed it is significant -- but it’s important to put these figures in perspective. Of those 417 million new handsets sold worldwide in third quarter 2010, 81 million (just under 20 percent) were smartphones, which Gartner defines as “communication devices based on open operating systems.” It is significant, but not necessarily surprising, that this number jumped 96 percent over the previous year, given that 2010 saw an explosion of new smartphone products. This sales bump may indicate a pent-up demand for smartphones. But the problem with pent-up demand is that it’s hard to predict how far it will go. This trend could continue until everyone has a smartphone -- or it could hit one of several walls. Here’s the big picture: Even though more consumers in more places than ever before now enjoy easy access to a broad array of smartphone choices, the vast majority (over 80 percent) of the new phones they’re choosing to buy are still feature phones. And that’s in the most recent quarter of this year -- so expect those handsets to remain in use for at least another year or two. Gartner’s numbers are global and so would include sales in places like China, Africa, and India -- where most people cannot afford smartphones, and local wireless networks may not easily support that data traffic. New mobile statistics from Comscore focus on the U.S. mobile phone market, which generally offers better conditions than developing nations for smartphone purchase and use. Comscore looked at all mobile phones currently in use in the U.S. (not just sales of new handsets) during third quarter 2010. Of the top five mobile manufacturers whose handsets are in use in the U.S., only one was a smartphone (RIM, which makes the BlackBerry line of phones). Far more Samsung, LG, and Motorola models currently are used in the U.S. than any smartphone brand. According to Comscore, about 25 percent of all U.S. mobile users currently have smartphones, which echoes Forrester’s figures from September. RIM still leads this pack, with about 37 percent of the U.S. smartphone market, but that’s dipped slightly from three months earlier, while Android use showed the largest gain (6.5 percent) of any U.S. smartphone brand. Economics are crucial for how most people purchase and use mobile phones -- both initial costs, and monthly bills. I’d like to see statistics and trends on the current average costs to own and use mobile phones, comparing per-phone monthly costs for two-year contracts vs. month-to-month vs. prepaid, and overlaying that to compare feature phones and smartphones. I suspect that right now typical monthly smartphone bills are still too high for most Americans, and that’s why feature phones remain popular. If and when those monthly costs ever drop significantly, it’ll be interesting to see whether more mobile users will flock to smartphones -- or whether most people really just prefer simpler phones. Ends