After five years of explosive growth sales of high-end smartphones have hit a plateau and the $2 trillion industry – telecom carriers, handset makers and content providers – is buckling up for a bumpier ride as growth shifts to emerging markets, primarily in Asia. Jeremy Wagstaff and Lee Chyen Yee report for Reuters.
This year, the number of mobile Internet users in the developing world will overtake those in the developed world for the first time – growing 27 times since 2007, compared to the developed world’s fourfold growth, according to estimates from the International Telecommunications Union (ITU).
“The center of gravity in the mobile ecosystem is likely to shift from the United States and Western Europe toward Asia,” Mary Ellen Gordon, director at mobile advertiser Flurry Inc, said in an emailed interview.
Poor network coverage or the high cost of 3G access relative to phone and SMS services still hold many users back. Last year, according to market research firm Euromonitor, 62 percent of all mobile phones sold in China were smartphones, but only 16 percent of subscribers had access to a mobile Internet connection.
The three carriers – China Mobile, China Unicom and China Telecom – typically dole out billions of dollars of handset subsidies to entice users to subscribe to their networks, dragging down profit margins.