NFC phones get a boost as smartphone sales set to top 1 billion in 2016

NFC phones could be set for more adoption if smartphone figures out this week are representative of potential growth in the marketplace. According to new research out this week, smartphone sales are set to explode over the next few years. Data house IMS Research released a new report that focuses on the growth of smartphones globally and foresees the massive growth that we have seen so far as a mere drop in the old proverbial bucket. The firm projects that sales of smartphones in 2011 will exceed 420 million devices and represent 28% of the market share of all handsets sold. This represents huge growth in the smartphone market and only bodes well for  NFC phones, which can utilize the extra power and capabilities for payment applications and more. IMS Research predicts that annual sales will surpass one billion devices by the end of 2016, accounting for one of every two mobile handsets sold.

Combining the IMS report with the earlier Juniper research on NFC phones

Market forecasts from Juniper Research in April project rapid adoption of NFC phones and services over the next 3 years,with at least 1 in 5 smartphones worldwide having NFC contactless functionality. Worldwide,Juniper forecasts almost 300 million NFC capable smartphones by 2014. However,if we take the one in every two projection of IMS report,by 2016 the NFC phones figures start to become staggering. It doesn’t take a mathematician to work out that half of a billion devices represents 500 million NFC phones being sold per year by the end of 2016. That figure doesn’t account for any sold before 2016 either,which starts to paint a picture of mass NFC capability. If it follows the Japan case study,it will result in mass NFC adoption for payments using NFC phones. IMS speculates that this growth will be fueled by the introduction of more affordable “entry-level” smartphones.

The Yankee group in late June,however,have a slightly different and more conservative projection for sales of NFC phones. The Yankee Group acknowledges that near field communications (NFC) is taking off,but projects less in the sales arena of NFC phones. Yankee predicted that NFC phones will grow from just 7 million in 2011 to 203 million in 2015,a compound annual growth rate (CAGR) of 208 percent. This obviously represents less than half of the potential 500 million we would get by combining the IMS report with the Juniper research. Interestingly,Juniper thinks that by 2015 there will be 500 million mobile banking users around the world. This could well translate in to NFC mobile payment users

Not all smartphones are created equally and we may be able to see which manufacturers may prosper more selling NFC phones

To say there have been winners and losers already is an understatement in NFC phones smartphonemanufacturing. For the winners,in smartphones and particularly those that create NFC phones,there are vast fortunes and accolades up for grabs. However,for those that do not keep up,there is clear and present risk that they could lose massive parts of their market shares. RIM and Nokia have fallen way behind in sales and yet ironically and arguably they have pushed NFC phones stronger than competitors so far this year,which represents their best hopes of gaining some all important ground back.

IMS smartphone research

“But despite the higher margins for NFC phones smartphones ,and the seemingly insatiable consumer appetite for converged devices,it is clear that not all OEMS are equally positioned to capitalize on this market trend,” says Josh Builta,Analyst in IMS’ Mobile Technologies Group. “For instance,LG,despite being the third largest OEM in the world,has offered a fairly limited smartphone portfolio in recent years,a factor that resulted in the company reaching less than a three percent share of the total smartphone market in 2010.”

“Clearly one of the key dynamics of the mobile handset competitive environment in recent years has been the inability of many traditional market leaders to recognize and adjust to the growing smartphone tier,” adds Builta,“The reasons for these failures vary and include everything from poorly designed and manufactured devices,unsatisfactory user interfaces,and portfolios that don’t offer products with a differentiating feature. These lapses have created opportunities for newer entrants to the market,which they have aggressively pursued.”

We can only speculate on NFC adoption or smartphone growth. We can guess about sales of NFC phones,but at the end of the day the market will prove itself. What is clear is that NFC adoption is happening already and projections suggest that this move in the technological landscape is due to grow rapidly. If you are interested in seeing what NFC phones are available today,check out our NFC phones list here.IMS research smartphone press release

Global Smartphones Sales Will Top 420 Million Devices in 2011,Taking 28 Percent of all Handsets,According to IMS Research

Date:27 July 2011
Austin,TX,July 27,2011 – Sales of NFC phones smartphones will exceed 420 million devices in 2011,accounting for nearly 28 percent of the entire global handset market,according to IMS Research,the leading independent provider of market research and consultancy to the global electronics industry. With the introduction of more affordable “entry-level” NFC phones smartphones ,IMS Research predicts that annual sales will surpass one billion devices by the end of 2016,accounting for one of every two NFC phones mobile handsets sold.

“But despite the higher margins for smartphones,and the seemingly insatiable consumer appetite for converged devices,it is clear that not all OEMS are equally positioned to capitalize on this market trend,” says Josh Builta,analyst in IMS’ Mobile Technologies Group. “For instance,LG,despite being the third largest OEM in the world,has offered a fairly limited smartphone portfolio in recent years,a factor that resulted in the company reaching less than a three percent share of the total NFC phones smartphone market in 2010.”

At the same time Nokia saw its portion of NFC phones smartphone market decline so dramatically that in early 2011 the company dropped the Symbian platform in favor of Microsoft’s Windows Phone OS. In 2Q 2011,Nokia reported smartphone sales fell to 16.7 million,down 34 percent from the same period in 2010.

“Clearly one of the key dynamics of the mobile handset competitive environment in recent years has been the inability of many traditional market leaders to recognize and adjust to the growing NFC phones smartphone tier,” adds Builta,“The reasons for these failures vary and include everything from poorly designed and manufactured devices,unsatisfactory user interfaces,and portfolios that don’t offer products with a differentiating feature. These lapses have created opportunities for newer entrants to the market,which they have aggressively pursued.”

In recent years,no company has flourished in this environment as much as Apple. Apple’s 2Q 2011 results in which it reported record sales of more than 20 million iPhones indicates it can be expected to remain an influential presence in the market despite the increased competition.

However,Apple is not alone in its success. Of the traditional handset manufacturers,Samsung has demonstrated the best results in recent years. Capitalizing on its diverse portfolio – which includes devices using the company’s own bada operating system along with Android and Windows Mobile – as well as its highly popular Galaxy series,Samsung NFC phones smartphone market share increased from about three percent in 1Q 2010 to over 13 percent in 1Q 2011. At the same time smaller,dedicated NFC phones smartphone vendors such as HTC have seen their position rise dramatically.

According to Builta,“These companies are well positioned to benefit from the projected growth of the NFC phonessmartphone market in the future. Though the other OEMs are stepping up their efforts in the space,companies such as Apple,HTC and Samsung have a considerable amount of momentum. Catching them will not be an easy task.”

IMS Research examines and tracks quarterly handset and NFC phones smartphone market shares in its Mobile Handset Market Intelligence Service &Database. A valuable tool for companies requiring 24/7 access to the most up-to-date information on the mobile market,this service also provides up-to-date information on cellular subscribers,handset shipments,and mobile handset feature penetration. Provided with the database access is the Quarterly Market report,which offers subscribers additional insight and analysis on recent developments in the mobile handset market.
Editors Note:
For more information please contact:United States Wes Rogers Tel:+1 912 506 0869 wrogers@greenfieldscommunications.com Europe Clive Savage Tel:+44 (0) 07824 706 402 clive@greenfieldscommunications.com
About IMS Research:
IMS Research is a leading independent supplier of market research and consultancy to the global electronics industry,offering syndicated market studies,custom research and consultancy services. Clients include most of the household names in the industry. IMS Research has offices in Europe,the US,China,Taiwan,South Korea,and Japan. To find out more,contact IMS Research:enquiries@imsresearch.com;T:+44 (0) 1933 402255;http://imsresearch.com

Smartphones and NFC phones sales set to grow

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