Adoption of smartphones has been particularly rapid in Asia and Europe. The aggressive deployment of advanced wireless networks in these regions has encouraged early adoption of smartphones.
The Asia Pacific region currently accounts for about 37% of global smartphone sales with South Korea and Japan being leaders in smartphone usage. The European market accounts for 27% of global smartphone sales. Analysts expect smartphone sales in Europe to exceed sales in the Asian market in the coming years. North America’s market share in smartphone sales was expected to reach 25% by the end of 2004.
Nokia, the 800 lb. Gorilla of Smartphones.
Nokia (NYSE: NOK) is by far the dominant global smartphone manufacturer. The Finnish company is currently estimated to command half to two-thirds share of the global smartphone market.
Nokia recently introduced its feature-rich Nokia 7710 smartphone in Europe and Africa. The wide-screen Nokia 7710 smartphone includes a full Internet browser, an integrated music player, a camera with 2x digital zoom, and a FM radio. One of the nifty features of the Nokia 7710 smartphone is its ability to make weblogging mobile. Users can post pictures and text from the Nokia 7710 smartphone directly to the web through the ‘moblog’ client.
Nokia is also expected to introduce the Nokia 3230 smartphone in the first quarter of 2005. The Nokia 3230 smartphone features a video recorder and ‘Movie Director’ that will allow 1 hour of video to be captured.
Nokia is now increasingly looking at software licensing deals to help differentiate itself from its competitors. Nokia has recently signed licensing deals with Macromedia and RealNetworks. Nokia is also said to be working on handsets that will receive wireless television feeds.
Smartphone Investment Implications.
The increasing adoption of smartphones augurs well not only for Nokia but also for other smartphone manufacturers like palmOne (Nasdaq: PLMO) and Research In Motion (Nasdaq: RIMM) – data recovery from phone. palmOne recently introduced the GSM edition of its Treo 650 smartphone. Research in Motion recently released the latest model in its BlackBerry 7100 series, the 7100g.
The incorporation of additional features and functionalities that make smartphones the portable information center and entertainment device of choice has bullish implications beyond just manufacturers of smartphones.
Wireless service providers like Vodafone (NYSE: VOD) should see their average revenue per user being buffeted with increasing use of value-added services that smartphones enable.
Then too, the increasing adoption and usage of smartphones will require the rollout of 3G wireless networks in earnest, translating into business opportunities for wireless network equipment providers such as Ericsson (Nasdaq: ERICY)
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