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Subscriber Upside for Mobile & WiFi Phones

Smartphones are evolving quickly, and differentiation is becoming increasingly based on software and the operating system (OS) rather than form factor, according to the latest market study by Infonetics Research.

Smartphones still compete on hardware features that support key apps like photography or video viewing, but software and applications that enable a user's preferred mobile uses have an increasing influence on device selection -- personalization will be in demand.

For instance, the Android platform may be a work in progress, but the first handset to use it, the G1, is attracting high levels of interest, and future models are likely be optimized for key web applications like social networking. Open source platforms like Android are shaping the new competitive landscape.

Highlights from the Infonetics study include:

- The economic recession had a notable impact on the worldwide mobile phones market in the latter half of 2008, ending in flat manufacturer revenue growth for the year ($156 billion), as consumers and enterprises cut device spending.

- Infonetics forecasts an 8 percent drop in the total number of mobile phones sold in 2009, to 1.1 billion worldwide (down from 1.2 billion in 2008), in line with predictions from Nokia, among others.

- Smartphones were the best-performing segment of the mobile phones market in 2008 and the only segment to show unit and revenue growth in the second half of the year as the world economy entered recession.

- Bucking the general trend, smartphones are expected to out-perform the downturn and show modest growth in 2009, and will be the only mobile phone segment to maintain annual revenue growth over the next five years, and the only to post double-digit annual revenue growth from 2011 through 2013.

- Market penetration of higher-end phones is driven by accelerating HSPA deployments in North America, Western Europe, and developed regions in Asia Pacific.

- As a proportion of the total mobile phone market, W-CDMA gained a couple of percentage points in 2008 at the expense of CDMA2000, and GSM remained proportionately flat.

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