Asia gears up for smartphone bonanza

Smartphone sales are taking off in Asia after a slow start, as analysts predict that the number of phones shipped in the region will double this year to 18.8 million.

Large numbers of new customers are being lured into buying or upgrading to smartphones by attractive new features, according to research firm In-Stat.

"Major smartphone makers are providing better designs, better functionality and better cost structures, thus offering better pricing and a long-term plan for product portfolios," said Victor Liu, a Singapore-based analyst with In-Stat.

While only 7.4 million smartphones were shipped in the region in the first half of 2006, sales have picked up strongly are expected to exceed 11 million in the second half.

The market is on the cusp of mass smartphone adoption, according to Liu, who believes that Asia-Pacific sales will approach 65 million units a year by 2010.

Research firm Gartner stated recently that global smartphone sales grew 75 per cent year-on-year to reach almost 35 million in the first half of 2006, around 29 per cent of which were in Asia.

"Japan overtook EMEA to become the largest market for smartphones in the first half of 2006," said Gartner principal research analyst Roberta Cozza. " Japan now accounts for 33 per cent of the worldwide smartphone market."

Asia has approximately 900 million mobile phone subscribers, according to recent estimates.

"Customers are seeing the continuous functional improvement of smartphones, the introduction of mid-range models, better designs, enriched third-party applications, and more high-speed wireless connectivity in public and private locations," Liu wrote in a recently published industry report.

"The Asia-Pacific smartphone market is full of potential for existing players and new entrants."

The burgeoning market is indeed attracting new entrants. PDA makers in Taiwan, home to several major phone makers, are switching production to PDA phones and smartphones, according to Taipei's government-sponsored Market Intelligence Center.

As the smartphone market matures, analysts expect increased competition to iron out some of the differences between vendor offerings.

For example, the number of different operating systems on offer across the market is predicted to decrease as developers cut costs by focusing support efforts on a narrower range.