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Emerging markets to drive smartphone growth

Smartphones are set to account for 37% of handset sales in 2014, with emerging markets a catalyst for growth, according to a report from Pyramid Research.

Emerging markets to drive smartphone growth
Developing markets including Africa and Latin America are set to drive sales of smartphones.

Smartphones are set to more than double their share of the total handset market by 2014, but operators and vendors will need to work closely together to benefit from the trend, according to a report from Pyramid Research.

Smartphones, which currently account for about 16% of handset sales, will account for 37% of sales in 2014, representing "an enormous sales opportunity" for vendors and service providers globally, particularly in emerging markets, according to the report.

Although the US dominated global smartphone sales in 2009, Pyramid Research expects China to capture the number one position in 2010, with some aggressive operator strategies helping the country take the lead, according to Omar Salvador, senior analyst at Pyramid Research and lead author of the report.

Latin America will be the fastest growing region for smartphone growth at a compound annual growth rate of 48%, followed by Africa and the Middle East with a 39% CAGR.

According to Salvador, the growth of smartphones in emerging markets will be driven by "operators' aggressive promotion of smartphones" using broader portfolios including attractive pricing for services.

 "With smartphone and data ARPU growth at the centre of the strategies of operators and handset vendors, the two will need to work together to make the most of the opportunity," Salvador added.

"Understanding local conditions will be vital for operators, smartphone vendors, and OS developers, as operator strategies differ substantively across markets based on the method of payment (postpaid or prepaid), the prevalence of subsidies, the level of competition, as well as the market shares of operating systems."

He added that Brazil, India, Turkey, and Nigeria will be the fastest growing markets for smartphones over the next five years, with CAGRs of 43%, 39%, 37%, and 34% respectively.

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