|Country||2011 Market Share||2012 Market Share||2016 Market Share||2011-2016 CAGR|
|Rest of World||51.1%||46.4%||46%||18.1%|
As stated in the press release, the big player going forward will be China: "Strong end-user demand and an appetite for lower-priced smartphones will make China (PRC) the largest market for smartphones this year, overtaking the United States as the global leader in smartphone shipments.".
Although worldwide smartphone market share in the United States is expected to decline to 14.5% by 2016, don't forget about the tablet, its larger touch screen cousin. Forrester's Sarah Rotman Epps put out some figures a few months ago:
We now expect 112.5 million US adults to own a tablet in 2016, which will equal 34.3% of US adults. In Europe, the numbers are similarly impressive, with an expected 105.7 million tablet users, or 30.4% of consumers 16 and older, in the EU-7 by 2016. With an assumed replacement rate of two years, cumulative unit sales will be much higher: In the US, we forecast that consumers will buy 292.5 million tablets from 2010 to 2016.My investing action plan of buying platform agnostic companies in the tablet and smartphone space is on the up-and-up if these research reports are remotely correct in their assumptions. However, I still believe it's the growth in China that will take the wireless broadband infrastructure sector to a higher level. Initially, it will be the smartphone market that may be the catalyst.
As reported by IDC analyst Wong Teck-Zhung:
Looking ahead, the PRC smartphone market will continue to be lifted by the sub-US$200 Android segment. Near-term prices in the low-end segment will come down to US$100 and below as competition for market share intensifies among smartphone vendors. Carrier-subsidized and customized handsets from domestic vendors will further support the migration to smartphones and boost shipments. Looking ahead to the later years in the forecast, the move to 4G networks will be another growth catalyst.The Chinese do business differently than we do, just like in many other foreign markets. You've got to grease the palms of the party bosses in the PRC, similar to the payola schemes in Mexico. It doesn't pay to be the "Ugly American". It's better to implement money making strategies in foreign countries by their rules.
This bodes particularly well for three companies I have shares in: Velti (VELT), Glu Mobile (GLUU), and CEVA (CEVA). All three organizations have significant relationships in the PRC. The trio are also internationally positioned, which will increase business in whatever continent they are operating.
There is open warfare between Apple (AAPL) and smartphone manufacturers which utilize the Android (GOOG) operating system concerning hardware patent issues. This is a domestic problem in its current form. The recent decision against Samsung may go as far as The Supreme Court. No matter what happens, it still won't stem the tide of smartphone and tablet adoption globally. From my vantage point, this is a sector that is about to detonate, if not by the New Year, then certainly by Summer of 2013. China will play a big part.