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There are few emerging market countries that are particularly mature in terms of their cellphone and smartphone usage and buying patterns (China, in particular stands out); but there is a large contingent of emerging markets who are not as mature in this regard. What are some of the factors that have held back smartphone adoption in these markets and further to that; what is being done to accelerate the adoption rates?
In 2008; smartphone sales accounted for just nine percent of all phone sales in China. In 2012; that number skyrocketed to 59% of all phones being sold in China being smartphones. But what are the factors that have influenced that immense growth. In short it can be distilled to one major factor (as well as some secondary factors).
Price; the ultimate change agent
The price points of smartphones dropped dramatically as the technology and IP became more attainable to the mass market. This meant that the adoption curve drastically increased.
Looking across to India; the same growth phenomenon has been seen — and with the same reason as China. The price point of the iPhone 5c has reached a level where it is perfectly positioned for the consumer to take advantage of the device. Couple this together with highly incentivised trade-in programs on old phones as well as perpetually decreasing data and per minute call costs; and you have the perfect conditions for high smartphone sales.
The South African market has demonstrated similar conditions with phones being bundled together with competitive data and per minute packages.
According to a Nielson study conducted in 2011 across the BRIC countries; feature phones are still dominant; but the smartphone is eroding that market share on a near daily basis!
Smartphone adoption and sales numbers are predicted to grow approximately 22.5% in 2014 across the globe; but particularly in the BRIC markets.
What will be interesting to watch is what the smartphone manufacturers do with these emerging markets. Will Microsoft-Nokia try and heavily target these markets before Samsung and Apple can get a substantial foot-hold or will they be beaten into submission and forced to be happy with their third place status while the other giants fight it out for the top spot?!
Of course the mobile devices themselves are only part of the equation; the entire mobile ecosystem is vitally important to watch. Economies in the emerging markets can take advantage of the mobile economy and the potential for true enterprise mobility to further improve their business effectiveness.
Needless to say; 2014 is going to be a more than interesting year to watch how smartphone penetration tracks against a potentially inversely proportional data and cost per minute call rate.