Smartphones graduate

Smartphones were the device success story of 2008, and they will be for 2009 if carriers and handset manufacturers get just a little smarter. According to several analyst reports, smartphones will continue to see growth this year, but price and applications will determine how much.

For 2009, iSuppli is forecasting global growth as high as 11%, totaling 192.3 million units shipped, or as low as 6%, reaching only 183.9 million units. According to the firm, the industry will make it to the high end only if operators cut fees for data services and offer aggressive subsidies to reduce customer smartphone prices. Both the wireless operators and handset-makers have to sell consumers on the value of the smartphone to increase their already eroding confidence in the purchase, iSuppli said.

The NDP Group believes smartphone-makers and wireless operators already have made moves in this direction. Led by the release of Apple's iPhone 3G at $199, the average price for a smartphone fell 23% from $216 in Q4 2007 to $167 last year, NDP found. As a result, smartphone sales to U.S. consumers rose to 23% of all handset sales in Q4 2008, compared to just 12% in Q4 2007.

More so than price, it is application stores that are driving smartphone purchases, according to a Juniper Research report. Rising demand for complex multimedia-centric apps is what's forcing handset manufacturers to design increasingly smart and highly personalized mobile devices, report author Andrew Kitson wrote. Juniper believes smartphone sales, driven by online app stores, will reach around 300 million by 2013.