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Smartphones will Transform the Global Mobile Markets

Total mobile phone handset shipments across all markets will increase by 29 percent -- from 1.7 billion in 2012 to 2.2 billion in 2016. The key driver of this global growth will come from the smartphone segment, which is forecast to become larger than the ultra-low cost, low-cost, and feature phone segments combined by 2016.

The total shipments of non-smartphone devices will grow 1.08 billion in 2012, and to 1.09 billion in 2016 while smartphone shipments will grow from 643 million to 1.1 billion over the same period.

Mobile device manufacturers that have had prior success addressing the low-cost handset segments will be under pressure to shift their new product portfolio to smartphones -- or plan the projected market downside.

Considering that they currently serve consumers with low disposable incomes, these OEMs will need to deliver smartphones that are price competitive to low-cost feature phones.

"This emerging scenario could become a very dangerous situation for Nokia’s handset business as the smartphone and feature phone segments will not be able to support each other in trying times," says Kevin Burden, vice president and practice director, mobile devices at ABI Research.

Low-cost OEMs that are shifting to smartphones, such as Huawei and ZTE, will be a key driving factor for the growth and innovation in the sub-$150 smartphone segment. Low-cost smartphones are forecast to grow from 45 million shipments in 2012 to 170 million in 2016.

"The writing is on the wall: either you have a successful smartphone strategy or you will have to steal market share to grow," says Michael Morgan, senior analyst, mobile devices at ABI Research.

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