Ever-improving networks and a big hardware announcement that will send handset prices plummeting both point to smartphone growth in 2011 that could totally eclipse anything we've seen before.
Smartphones have been growing at an unbelievable clip over the past year but they still account for only around a third of all phones in the US and an even smaller percentage internationally. In developing countries, the price of smartphones, aside from some 'quasi-smart' Nokias (NOK) are out of reach for all but the elite. India and China each have billion plus populations and growing middle classes, but neither country is even at a 10% market penetration of smartphones.
Globally, market intelligence firm IDC counted 269.6 million smartphones sold this year, compared to the 173.5 million units shipped in 2009.
In 2011, we might see half a billion phones sold worldwide. Smartphones will likely blow by traditional computers next year as the way most of the world gains access to the Internet.
Two major factors will drive this, in tandem: Wireless infrastructure is getting better every day, and hardware is getting cheaper. Cheaper hardware will eliminate the need for subsidies and therefore will improve competition between carriers, and spur them to improve their networks. Google (GOOG) Android head Andy Rubin calls this a 'perfect storm' for smartphone adoption.
A closer look at price: In 2010, the cheapest mainstream Smartphone was just below $200 (unsubsidized by a carrier contract-- the way most of the world buys its phones). Some extremely cheap (but feature rich) Chinese brands have recently fallen to around $150. But based on the hardware announcements we're seeing, including one big player in particular that price will be cut in half:
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