Smartphones Poised to Overtake Mobile Phones in 2013: 10 Reasons Why

By Don Reisinger  |  Posted 2013-03-04

Smartphones Poised to Overtake Mobile Phones in 2013: 10 Reasons Why

Smartphones are poised for a big 2013. In fact, a new study from research firm IDC has found that as worldwide feature phone shipments decline, the number of smartphones to hit the market will rise significantly.

For the first time, smartphone shipments in 2013 will outpace mobile device shipments. According to IDC, 918.6 million smartphones will ship during the year, representing about 50.1 percent of all device vendor shipments.

Although mobile phone and smartphone shipments will be nearly tied this year, looking ahead, the latter will continue to gain market share. By 2017, less than 40 percent of all mobile device shipments worldwide will be feature phones.

That smartphones have finally overtaken feature phones might surprise some. For years, feature phones were tops because they delivered a low-price alternative to the higher-priced smartphones. More importantly, they catered to emerging markets around the world where land lines were scarce and people needed affordable mobile phones, but couldn't afford smartphones.

Now, though, things are different. And smartphones reign supreme.

Read on to find out why.

1. Emerging markets

As noted, emerging markets were once the reason mobile phones outpaced smartphones. However, people in those countries are increasingly opting for smartphones. Why? Blame it on the vendors. Now more vendors than ever are offering low-priced smartphones designed for emerging markets. Nokia, for example, sells several smartphone lines that are shipped to South American and Asian nations to give customers smartphone features for a mobile phone price. As expected, customers are lining up to get those products.

2. Blame it on Apple

Apple is arguably the biggest reason smartphones today are so popular. In 2007, when the iPhone launched, Apple transformed the smartphone market with it touch-screen-based iPhone. Soon after, the company's device set sales records all over the world. Meanwhile, other companies delivered their own smartphones and soon enough, just about everyone wanted a smartphone with a touch-screen.

3. Blame it on Google, too

Google might also be the culprit behind the smartphone's dramatic rise in the mobile space. Google's Android operating system delivered an open-source option that smartphone makers wanted to compete with Apple. Now, Android is a hugely popular operating system with a ton of vendor support and faithful consumers.

4. China is booming

When the mobile phone market was still soaring, China wasn't nearly as important a market as it is today. The Chinese middle class is booming and as their paychecks rise, so too are their desires for mobile devices. Consumers in China are throwing away their feature phones at a rapid rate so they can get their hands on smartphones like Apple's iPhone. Without China, the smartphone market wouldn't be so large.

Smartphones Poised to Overtake Mobile Phones in 2013: 10 Reasons Why

5. Device quality is on the rise

As history has shown, smartphones didn't always have the best track record for quality. Companies like Apple and Samsung have consistently delivered high-quality products. But many others striving to carve out a share of the market introduced lower-quality products. Now, though, companies are improving device quality and delivering smartphones with better features. As a result, they are scoring stronger sales.

6. Carriers are coming along

Carriers have been huge motivators for smartphone adoption. On one hand, the companies are investing heavily in 3G and 4G Long Term Evolution (LTE) technology around the world to provide customers with a high-quality data experience on their smartphones. On the other hand, they're marketing smartphones heavily to increase sales. Without the support of carriers, it's unlikely that smartphone adoption would have risen as fast as it has.

7. A "follow me" mentality

The nice thing for smartphone vendors is that today's consumers and enterprise users tend to follow their friends, colleagues, or business associates. So, when one of those groups decides to adopt the latest trendy smartphone, it's not uncommon for them to go out and buy the same model. Keeping up with the Joneses has been a factor in the IT industry for ever. Now it's helping smartphone makers.

8. Pricing is outstanding

Although smartphones are very expensive when they're unsubsidized, they're actually quite affordable when they come with two-year contracts. That's especially true when one looks at Apple's iPhone 4, which is available for free with a two-year contract. Since customers can walk out of the store with a "free" smartphone even if it's tied to a two-year contract with fairly costly monthly fees, why wouldn't they choose that over an underpowered feature phone alternative?

9. The value argument

Value is everything in a business decision. Now more than ever, enterprise users are finding that they can derive more value from a smartphone than they can from a mobile phone. After all, a smartphone comes with email support, Web browsing and apps. All that improves productivity and return on investment. What's not to like about that?

10. Marketing

Go ahead and try to find one marketing piece released in the last couple of years that promotes a feature phone over a smartphone. Give up? Marketing is still a very important tool in the sale of products. Device makers and service providers are leveraging marketing as much as possible to push smartphones. Judging by IDC's numbers, it's working remarkably well.

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