Phone market facing major shakedown

Smartphones are now suitable for a whole variety of applications

The mobile phone market is facing a major shakeup in the next four years, and many established players will be left behind as the market moves to smartphones.

Delegates at Semicon West 2009 heard how the market for smartphones is growing rapidly, and is cannibalising other sections of the consumer electronics market.

However, some of the biggest names in the industry are not ready and will be left by the wayside, according to Gartner's principal research analyst Jon Erensen.

"There is a huge shift going on in the market," he said. "Some of the existing players will find it difficult to catch up. Expect a major shakeout."

Erensen explained that smartphones had reached a technological level that makes them a suitable platform for a whole variety of applications. Phones built around single functions, like music, are being replaced by smartphones, and the platform is stealing sales from the consumer electronics industry in general.

However, successful smartphones need to have strong hardware and functional software. Some of the biggest mobile phone providers lack crucial software expertise, and will suffer in the years ahead, according to gartner.

Erensen named LG, Motorola and Samsung as the companies with most to fear. Apple is looking strong, and Nokia has been buying mobile software companies to augment its offerings and should prosper.

The analyst predicted that smartphones sales will show an average compound annual growth rate of 28.7 per cent by 2013, compared to -2.1 per cent for low-end phones and -4.5 per cent for enhanced phones.