Smartphone Landscape to Change Dramatically in Asia

Apparently, not all industries sink with the recession. Latest industry figures show that global smartphone business expanded by 4 percent in the third quarter compared with a year ago. Bertrand Bidaud, managing vice president at Gartner Group, shared his market views with CNBC.

Big players like Apple, Research In Motion and Nokia all see a significant growth in sales. LG Electronics too, once a big piece of the mobile industry, plans to invest heavily in this lucrative smartphone arena.

LG, Korea’s second biggest electronics company, used to face competition from traditional cell phone operators like Sony and Nokia. Yet as Apple and RIM heavily invest in the smartphone business, to join the game LG will have to take on new rivals who are already established.

But how is the smartphone market in Asia right now?

Bertrand Bidaud, managing vice president at Gartner Group shared his view with CNBC Asia.

“The smartphone sector is very concentrated,” he says. "Right now Nokia, Sony and Blackberry own around 70% of the market. But because this market is growing so fast and is resisting quite well in terms of price pressure, it is attracting interest from all the other players like LG, and Samsung."

“So this landscape is going to change very dramatically in the next few quarters,” Bidaud says.

As the smartphones get cheaper and Asian consumers get richer, smartphones, once a luxury for the wealthy, become more accessible to average consumers. Plus, service providers are subsidizing hand-set makers to lure consumers into contracting with them, which allows service providers to move customers to a higher-end product such as iPhones.

Although Asia still has a very large low-income population, innovation is catching up quite fast, Bidaud adds.

“We expect in five years the smartphone segment to grow three times, whereas the overall mobile segment to grow by 50 percent.” Bidaud concludes, “So it’s going to grow much much faster than the rest of the industry.”


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Disclosure information was not available for Bidaud or his company.