The Mainstreaming of Smartphones

Everyone who reads this blog or pays attention to trends in the mobile market knows that smartphone users -- iPhone users in particular -- are much more engaged with the mobile Internet than conventional mobile phone users. Replacement cycles are also getting shorter, causing more people to turn in their "feature phones" for these higher end devices.

While price (handsets, data plans) is often the main driver of these buying decisions (witness the $99 iPhone), culture has a powerful if less tangible influence on consumers. The NY Times covers the latter aspect of the phenomenon:

For a growing swath of the population, the social expectation is that one is nearly always connected and reachable almost instantly via e-mail. The smartphone, analysts say, is the instrument of that connectedness — and thus worth the cost, both as a communications tool and as a status symbol . . .

Smartphone ownership hovers around 13%-14% of the US mobile handset market. Recently, we asked consumers who didn't currently own smartphones whether they intended to upgrade in the near future:

Smartphone purchase intent Opus

n=603, April, 2009

Our guess is that we'll hit 25% smartphone penetration in the next several years. That still leaves lots of less smart phones where SMS assumes a much greater share of the activity. 

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Related: The Yankee Group projects that 41% of US consumers will upgrade to a smartphone as their next mobile device. The firm also claims that by 2013 smartphones will represent 38% of the market. 

I think this latter number is aggressive, but if pricing (handsets, plans) is right it could be approached. I would say it's probably closer to 30% of all handsets (up from 14% this year) on the aggressive end. 

I don't know what time frame is being used regarding the 41% number above (next handset purchase). But if you look at the LMS/Opus chart above, you see that 41% are planning on buying smartphones -- in agreement with the Yankee figure -- with only 20% saying it will happen in the next year.