Smartphones, Not Tablets, Top Consumer Shopping Lists: Gartner
While major electronics vendors from Samsung to Hewlett-Packard and Motorola are making giant "to-dos" over their iPad-competing tablet efforts, these devices actually rank lowest on Americans' shopping lists this year, Gartner revealed in a Feb. 17 study.
When polled about the devices they planned to purchase in 2011, the majority of Americans said they had their eyes on an open-source operating system (we're looking at you, Android) smartphone. Laptops ranked second, followed by desktops, feature phones, e-book readers and, in sixth place, tablets.
"Continued low retail pricing and widespread adoption of applications like Web browsing, e-mail, Twitter, Facebook, GPS and games will continue to stimulate consumer demand," Hugues de la Vergne, principal research analyst at Gartner, said in a statement. He added that in 2010, "aggressive operator device subsidies and lower-cost monthly data plans" helped to drive smartphone purchases.
Expected to climb still higher, Gartner forecasts that U.S. smartphone sales will jump from 2010's 67 million units to 95 million units by year's end. By contrast, mobile PC shipments are expected to rise, during the same period, from 45.6 million units to 50.9 million units.
Tablets, according to research firm IDC, are expected to finish 2011 with 45 million units shipping and grow to nearly 71 million units in 2012.
Consumers' interest in smartphones will benefit not only the high end of the market-where Apple's iPhone and various HTC, Motorola and Samsung devices compete-but the middle and lower tiers as well.
"As more consumers adopt smartphones, the market will shift from the more technically astute tech savants toward less tech-savvy comfortable conformists. Issues such as ease of use will become even more important in 2011," said de la Vergne. "First-time smartphone buyers may not be familiar with the range of operating systems and the different versions of those OSes. With operators offering generous return policies on all mobile phones, it is important that handset producers offer devices that will appeal to the less technologically advanced consumer."
Nokia has long been a strong player in these lower tiers, offering a range of devices to emerging markets, and lately its competitors are paying more attention to the rest of the phone market. Samsung, for example, after the enormous success of its high-end Galaxy S smartphone line, in January introduced four more-affordable, midrange Galaxy phones-the Ace, Fit, Gio and mini-all running Google's Android.
Similarly appealing to first-time smartphone owners, the Gartner report suggests, are carrier data plans with pricing options low enough to encourage new users on board.
"Communication service providers should expand tiered data pricing to make open OS devices more affordable to the mass market," explained de la Vergne. "Introductory limited data plans of $10 to $15 a month will expand the market greatly for these devices."
In the United States, the major carriers appear to be already clued in. In October 2010, Verizon Wireless CFO John Killian confirmed during a conference call announcing the carrier's third-quarter 2010 earnings that, like AT&T Wireless, it would begin offering tiered pricing, with a plan starting as low as $15.
Though during the call Killian said that Verizon's stand-alone position in the market allows it to "approach the marketplace from a data pricing [perspective] that's unique from what other companies do," he said he expected first-time smartphone owners to come on board with the $15 plan, but over time to migrate to the $30 option.
"In many cases," Gartner's de la Vergne confirmed in the statement, "consumers will upgrade to higher-priced data plans over time, once they get hooked on these services."