Smartphones expected to reach half billion in sales in 2011

Dec 26, 2010
Finance

2011 is looking good for smartphones, with retail prices possibly dipping to $100 or less. The result will be smartphones likely bypassing traditional computers globally in 2011, adding fuel to frenzy for apps. In 2011, 500 million—AKA one half-billion—smartphones could be sold. In comparison, the market research firm IDC said 270 million smartphones were sold […]

2011 is looking good for smartphones, with retail prices possibly dipping to $100 or less.

The result will be smartphones likely bypassing traditional computers globally in 2011, adding fuel to frenzy for apps.

In 2011, 500 million—AKA one half-billion—smartphones could be sold. In comparison, the market research firm IDC said 270 million smartphones were sold in 2010, up from 174 million in 2009.

Seth Weintraub reports in Fortune that the acceleration in 2011 will be fueled by improved wireless networks and cheaper prices for hardware. “Cheaper hardware will eliminate the need for subsidies and therefore will improve competition between carriers, and spur them to improve their networks,” he said.

Jim Tran, VP/GM – Handset Line of Business for Broadcom (BRCM), global leader in semiconductors for wired and wireless communications, told Fortune that phones made from its chipsets will retail for under $100, maybe as low as $75. These smartphones, which could be touted next month at the Consumer Electronics Show, may hit the market within three to six months. “That Nexus S that costs $530 now off contract will cost just a fraction of that in just one year,” Weintraub said.

He said the low prices finally could open emerging markets in Asia, such as China and India, to smartphones, creating huge demand.

The cheaper phones will have an impact in the USA as well as consumers will opt for month-to-month plans, Weintraub said. With increased competition, steep termination fees could be vaporized and data prices could drop.

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The columnist suggests this could be a big boost for phones using Android from Google (GOOG). “If you thought Android going from 30,000 activations a day to 300,000 activations/day was impressive, 2011 might be an even bigger growth year for Android,” he said.

Meanwhile, not everyone finds Android addictive.

MG Siegler, a self-described iPhone lover, backhands Android while offering kind words in TechCrunch for Microsoft’s (MSFT) Windows Phone 7.

Noting the iPhone is the device to beat, the writer maintained that WP7 outdoes Android, describing it as a less-polished version of iOS from Apple (AAPL).

“Windows Phone is completely different. From the homescreen tiles to the UI (codenamed Metro), when I’m using it, I don’t feel like I’m using a poor-man’s iPhone. I feel like I’m using something new,” Siegler said.

The writer praised WP7’s live updating tiles. The Netflix app is singled out for being better than that for iPhone, plus Netflix is MIA for Android.

Also, Siegler gave kudos to WP7 for taking advantage of Microsoft’s links to the gaming world, noting that  iPhone was slow to catch on to the importance of games to users and Android offering “awful” games.

WP7 hardware? Siegler said it’s not bad: “The screen is great, but the device itself feels a little too plastic-y. Compared to the iPhone 4, it’s shockingly light — which is great when it’s in your pocket, but feels a little odd when it’s in your hand. It’s so light that it feels almost as if it’s missing the battery (which, of course, it isn’t).”

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Still, the writer is an iPhone loyalist: “I’ve been pleasantly surprised with how much I’ve liked Windows Phone. Would I recommend buying one? Certainly not on AT&T (T), but if and when it came to Verizon (VZ), I certainly think it’s worthy of consideration. Would I replace my iPhone with it? Well, no.”

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Howard Wolinsky

Howard Wolinsky is a Chicago freelance writer specializing in health and tech topics. He covered those beats for the Chicago Sun-Times.

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