Smartphone sales to soar as app stores proliferate

Mobile users are increasingly turning to complex multimedia-centric applications, and smartphones will account for 23 percent of all new handsets sold by 2013, according to Juniper Research.

The analyst firm's Next Generation Smartphones: Players, Opportunities & Forecasts 2008-2013 report said that annual smartphone sales will reach around 300 million by 2013, as the growing number of mobile application stores helps to drive demand.

Apple's iPhone App Store was not the first, but has crystallised the focus and appeal of mobile application stores giving users a centralised repository of applications, content and services for their device.

Around 300 million applications were downloaded by iPhone users within five months of the App Store launch, according to Juniper, and recent figures from Mobclix show that the iPhone marketplace offers over 6,000 games, 1,500 of which are free.

Picking up on this trend, this year's Mobile World Congress in Barcelona saw a number of industry players, including Nokia, RIM, Microsoft and Google, announce plans for mobile application stores of their own.

"As vendors increasingly open up the operating system software on their devices, the rate at which mobile handsets evolve into personalised internet-centric mobile computers will gather momentum," said Juniper analyst Andrew Kitson, the report's author.

"In this way, users are having an indirect impact on the way in which devices are changing their form and function, as well as how they interact with their surroundings. Very soon, the majority of new phones will be smartphones."

Kitson said that this demand for devices better suited to individual users' needs is forcing handset manufacturers to design increasingly smart and highly personalised mobile devices that can be customised through the choice of applications installed.

The report also predicts that sales of smartphones will remain healthy despite the global economic downturn, helped by a decrease in the number of new mid-range devices and an overall drop in prices.

"[However] device vendors are seeing falling margins on handset sales, and need to diversify into service provision with high-value content from which they and their network operator partners can profit," Kitson advised.