Operators see smartphones beginning to dominate handset sales

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However, the high cost of such devices is still a barrier to mass adoption in developing regions, and the removal of subsidies by some European operators combined with the introduction of upgrade fees by some US carriers also threaten to slow the take-up of smartphones in the developed world, the analyst said. The release of the Apple iPhone 4S in Q4 2011 gave a major boost to smartphone sales for the major operators in the USA, Wireless Intelligence noted. Few operators in the country report overall smartphone penetration, but in terms of smartphone users as a proportion of contract subscribers, AT&T stood at 59 percent in Q1 2012 (some 41.2 million subscribers in absolute terms), up from 46 percent a year earlier. The operator has been at the forefront in terms of migrating users to smartphones and noted in its Q1 2012 presentation that the devices generate an additional 90% of revenue when compared to non-smartphones. Sprint currently has a higher smartphone contract penetration with 69 percent at Q1 2012 (albeit from a lower base), meanwhile Verizon Wireless? contract smartphone penetration increased from 28 percent in 2010 to 44 percent at Q4 2011. Elsewhere, Turkcell stated in its Q1 2012 results that it expects its smartphone penetration in Turkey to be around 20 percent at the end of financial year 2012, which will be significant as the operator has observed that data ARPU for its smartphone users is five times greater than that of non-smartphone users. In Russia, 12.4 percent of phones on the MTS network were smartphones in Q3 2011, while in Brazil, TIM reported rapid adoption of the devices, with penetration rising from 12.6 percent in Q1 2011 to 31.1 percent in Q1 2012. Finally in Africa, Vodacom South Africa had 4.8 million active smartphones on its network at the end of 2011 accounting for 18 percent of total connections, but the picture for the whole of the continent is quite different; according to Orange (France Telecom), only one in every 32 phones (or 3.1 percent) in Africa is a smartphone. Calum Dewar, analyst at Wireless Intelligence, said the increasing availability of 3G devices and the willingness of operators to subsidize them has driven the rapid adoption of smartphones, although there is a significant disparity between developed markets (78 percent 3G-enabled devices on average) and developing economies (61 percent). ?These findings suggest that smartphone prices still have some way to fall before mass-market adoption of smartphones is likely to occur in regions such as Africa, where outside of South Africa smartphone penetration is currently negligible. Many of the smartphones that are currently available sit at the top end of the market, with a small (but increasing) amount at the lower end,? he said. ]]>

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