iPhone launch in China to boost smartphone market, says iSuppli

The arrival of Apple's iPhone in China is expected to help accelerate global shipment growth for smartphones in 2010 and 2011, following 2009 when growth is estimated to slow to 11.6%, down from 20.6% recorded in 2008, according to iSuppli.

Worldwide factory shipments of smartphones are expected to rise to 235.6 million units in 2010, up 27.9% from 184.2 million in 2009. Shipment growth will accelerate to 41.8% in 2011 to reach 334.1 million.

Although growth in the smartphone market is set to decelerate in 2009 compared to 2008, it still represents a rare bright spot for the overall handset market, iSuppli noted. Global handset shipments are set to decline by 12.3% in 2009, due to the global economic slowdown.

"China Unicom's move to start selling iPhones in China starting in the fourth quarter will sound the starting gun for the region's smartphone market," said Tina Teng, senior analyst for iSuppli. "The arrival of the iPhone has compelled China Unicom's competitor China Mobile to introduce its own smartphone products and app store, helping to boost the market."

Smartphone shipments to China will rise by 42.5% to 30.2 million units in 2010, up from 21.2 million in 2009, the fastest growth rate of any country tracked by iSuppli. China will experience the strongest growth in smartphone unit shipments of all global regions in the coming years. Shipments will grow at a 30.6% CAGR to 63.6 million units in 2013, up from 16.7 million in 2008, the research firm forecast.

Another factor contributing to the success of smartphones is the newfound maturity of the product's supply chain throughout the world, according to iSuppli. Wireless operators and handset brands are promoting the value smartphones deliver to consumers, rather than just playing up the hardware.

"The smartphone market now has moved past the infancy stage and has entered a period that presents enormous growth opportunities for a number of key players, including device manufacturers, operators, semiconductor vendors and platform providers," Teng said. "There has been broad deployment of 3G networks worldwide, a proliferation of wireless broadband services and the rising availability of various multimedia applications for mobile devices. With all this in place, wireless network operators are expected to offer competitive data service plans and aggressive subsidies to reduce consumer smartphone prices."