Rise of the budget smartphone predicted for 2012

24 January 2012

Rise of the budget smartphone predicted for 2012

Global demand for smartphones is expected to proliferate in 2012 with more than half a billion low-cost versions likely to be in use by the year’s end, according to Deloitte’s Technology, Media and Telecommunications (TMT) Predictions 2012.

The annual predictions report has become a successful forecaster of consumer and business technology trends, with 83% of the 2011 report’s predictions being borne out.

Deloitte New Zealand telecommunications leader John Bell says the 2012 report has some interesting predictions relevant to the New Zealand context, particularly around the increasing penetration of cheaper smartphones (typically assessed as selling for around $US100 although more likely to be $200-300 in New Zealand).

“The rise of the smartphone is analogous to the growth of the netbook, as consumers look to replace more basic handsets but don’t need the power or functionality of high-end devices,” Mr Bell says.

“It’s almost the perfect solution as a starter phone for teenagers wanting to enjoy the look and feel that smartphones offer, without the high price tag of more sophisticated handsets.”

The increasing use of smartphones will place pressure on applications developers, with a greater demand for free apps and consumers overwhelmed by choice among the multitude of apps available.

Currently only a fifth of downloaded apps surpass the 1000 mark and just a tiny proportion of unpromoted apps become successful. It is predicted there will be more than 2 million apps available by the end of 2012 – more than double the present figure.

“With so much choice, app-store providers will need to consider ways to improve and assure the quality of the products on offer, and create ‘app bundles’ for specific users” Mr Bell says.

The advent of the “digital wallet” – using mobile devices embedded with so-called near-field communications technology (NFC) – is set to rise, with up to 300 million to be in use by the end of 2013 While currently most devices essentially embed a credit card into a mobile phone, it is predicted the technology will have a greater application in the future, for purposes such as gaming, gambling and healthcare.

Mr Bell believes many New Zealanders may presently be uncomfortable using a phone to pay for items, concerned with the security of the devices. However, this perception is likely to change quite quickly as people understand the advantages, such as the case with Wellington and Auckland citizens who can access contactless payment when using public transport.

Bypassing the internet will increasingly be an option for delivering information and data between users as networks become strained by volumes outstripping capacity. With telecommunications companies balancing the need to invest in network improvement with the demands of customers for data capacity, infrared and Bluetooth connectivity is set for a resurgence as web bypass will emerge as a third network option alongside fixed broadband and mobile for transferring information.

“Demand for data just keeps growing exponentially and despite the difficult economic conditions plaguing much of the world, consumers are still making investments in new technology, particularly those which enrich their lives, putting strain on networks.”

For a full copy of the report with all of the Deloitte predictions, visit www.deloitte.com/tmtpredictions2012

About the 2012 TMT Predictions
The 2012 series of Predictions has drawn on internal and external inputs from conversations with member firm clients, contributions from Deloitte member firms’ 7,000 partners and managers specialising in TMT, and discussions with industry analysts as well as interviews with leading executives from around the world.

About Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.

About Deloitte in New Zealand
Deloitte New Zealand brings together more than 800 specialist professionals providing audit, tax, consulting, and financial advisory services to public and private clients spanning multiple industries. Our people are based in Auckland, Hamilton, Wellington, Christchurch and Dunedin, serving clients that range from New Zealand’s largest companies and public sector organisations to smaller businesses with ambition to grow.

Deloitte’s local experts draw on best practice and innovative methodologies from around the world as part of Deloitte Touche Tohmatsu. With a globally connected network of member firms in more than 150 countries, Deloitte brings world-class capabilities and high-quality service to clients, delivering the insights they need to address their most complex business challenges. Deloitte’s approximately 182,000 professionals are committed to becoming the standard of excellence. For more information about Deloitte in New Zealand, go to our website www.deloitte.co.nz

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