Half of US population to use smartphones by end of 2011: Update
Research #Market · 10 comments
by Horace Dediu
Half of US population to use smartphones by end of 2011 | asymco.
A month ago ComScore reported that in October 2010 25% of Americans above the age of 13 used smartphones. The latest report shows that share to have risen to 26.3%.
That means there are 24 percentage points of penetration to go until the majority of Americans are smartphone users. In absolute numbers this implies about 56 million additional users (and hence units sold).
The rate of penetration growth was 1.3 percentage points per month. Assuming no acceleration in this figure and assuming we rely on ComScore (vs. Nielsen which reports higher figures) then majority share is 18 months away, or mid-2012.
However, assuming some acceleration and a different sampling method, I still believe that we could see this figure by end of this year.
In either case the tipping point is near.
10 comments
seb ·
How does the iphone at verizon changes your forecast? I assume it is not included in your forecast yet.
Seth Weintraub ·
comScore isn't particularly accurate. and those $75 Android haven't hit the market yet either.
Plus Virgin's insane Smartphone plan hasn't been matched either.
asymco ·
I don't forecast "bottom up" meaning as a sum of individual sources of demand. My forecast is "top down" and a function of y/y growth rate.
I might edge the growth for the year back up near 80% from 70%. An even bigger factor than Verizon is what's happening in global markets.
Joel Bernstein ·
But how many of those will have data plans?
TomCF ·
This projection doesn't need to be all that accurate. It's an order of magnitude: 2x. For any company making profits on smart phones, this implies blowing away estimates, I think.
asymco ·
In the US, a very high proportion. Data plans may get into a price war.
Woochifer ·
That might be the key to hitting those numbers (I'm more skeptical about the smartphone market share hitting 50% this year), as existing feature phone users that haven't already transitioned over to smartphones will likely be far more price sensitive. Getting up to 50% will boil down to smartphones hitting the price points where you currently see feature phones, so it's a matter of when. Existing subscribers whose contracts are up will simply upgrade to a "free" smartphone when they renew.
But, I think one area where you'll hit a point of resistance is with no-contract/pay-per-minute phones, which happens to be the fastest growing subscriber base right now. Those consumers pay full price for their phones, and even those upcoming $75 Android phones will still be too steep for many in this group.
@aegisdesign ·
If they did, that would be a good thing for Nokia and Android phone manufacturers who would now be able to sell their cheaper handsets into the USA.
I suspect it may not happen without Apple releasing a cheaper model iPhone. Something so desirable that the carriers could not resist cheaper data plans.
Ziad Fazel ·
Thank you Horace. I think linearly extending the market share growth of smartphones could come up against another constraint: the capital spending needed by cellular carriers to handle that much more data. We have seen the iPhone repeatedly challenge ATT. One could argue a part of the iPhone going to Verizon is ATT's inability to add the network capacity at the rate Apple can sell the iPhones to use it. The larger factor, carrier preference, is itself partly dependent on customer experience with network capacity.
In the next 2 years, I think this problem becomes more complex with the advent of 4G. Carriers may delay investment in 3G now, in order to save capital for 4G in a year. The market will be fragmented into 3G networks and devices, and 4G networks and devices, which might make it harder to grow than one at the same wireless technology.
Anonymous ·
What hype! Does anyone remember what JFK had to say about the iPhone craze? http://www.washingtonpastime.com/drupal/was/iphone5/
hahahaha