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2012 Overview of Latin American Smartphone Market

  • January 2013
  • 51 pages
  • Frost & Sullivan
Report ID: 1623805


Table of Contents

This research service provides an overview of the Latin American smartphone markets from the standpoint of IT and telecommunications providers. The countries discussed include Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. Topics include market drivers and restraints and shipment forecasts to 2017. Moreover, this market insight highlights the main trends and technologies in this region.

Executive Summary

The Latin American smartphone industry is growing quickly. The growth of smartphones penetration increased the penetration of mobile Internet services and contributed to the development of the data services market

Latin America has had outstanding growth in smartphones shipments, driven mainly by Brazil, Mexico, and Colombia. The main factors driving this market are:
• The increased popularity of applications
• The advent of messaging services and social networks
• The increasing need for mobile connectivity
• The growth of the penetration smartphones, due to efforts to lower costs to stimulate increased popularity for the devices in Latin America
• The increasing production of smartphone handsets in Latin American countries that contributes to reduced taxes and total prices

This study provides an overview of the Latin American smartphone market and outlines the market drivers, restraints, and challenges and future trends in the region.


Exchange Rates
The U.S. dollar is the currency used to measure revenue in this study. For each of the countries below, the exchange rate is applied for 2011, the base year.

Argentina: $1 = AR$X
Colombia: $1 = CP$X
Brazil: $1 = R$X
Mexico: $1 = MXP$X
Chile: $1 = CLP$X
Venezuela: $1 = Bs.F$X

In this study, the number of smartphone devices are projected from 2011 through 2017.

Research Methodology
The research methodology for this study includes:
• Interviews with device vendors and market specialists
• Frost & Sullivan’s published research services
• A decision support database
• Company Web sites
• IT journals
• Published company financial statements

Market Definitions

Geographic Analysis
Latin American smartphone shipments presented in this research service include the total shipments in Argentina, Brazil, Chile, Colombia, Mexico, and Venezuela. Any information related to Latin America in this study is consolidated for these six countries.

Mobile Services
Mobile services are telecommunications services used without a particular fixed position. These services can be used with a mobile device. New mobile connections (prepaid and postpaid) and mobile broadband access to the Internet are the key mobile services in this study.

Prepaid and Postpaid Mobile Services
For prepaid mobile services, customers pay for credits and then use them. For postpaid, customers use mobile services and then pay after a period of time, usually a month in Latin America.

Mobile Content Services
Frost & Sullivan defines mobile content services as including all downloadable services, such as music, games, videos/TV, images, and subscription services through short message service (SMS), that a mobile carrier provides (excluding contests, operator promotions, and telephone-voting services). Mobile content services, such as music, games, and videos/TV, are data-intensive services that are normally offered through 3G services, such as high-speed downlink packet access (HSDPA) or high-speed uplink packet access (HSUPA).

Gray Market
A gray market, also known as a parallel market, involves the trading of a commodity through distribution channels that, while legal, are unofficial, unauthorized, or unintended by the original manufacturer. The driving forces behind a heavily active gray market for mobile phones include currency fluctuations, customer demands, manufacturer policies, and price variations.

Defining a Smartphone
These mobile devices provide more advanced capabilities than a typical mobile phone. Smartphones run operating system (OS) software that provides a standardized interface and platform for application developers. Applications written for a given smartphone platform can usually run on any smartphone with that platform, regardless of the manufacturer. Compared to Java or BREW applications, native smartphone applications usually run faster and integrate more tightly with the features and user interface.

The Smartphone Market can be Segmented in Two Primary Ways: Device Manufacturer and Mobile Operating System (MOS).
Device manufacturers often differ in their strategies for device production. Some manufacturers produce smartphones that use various OSs (e.g., HTC manufactures devices that use Windows Mobile and Google Android). Other manufacturers, such as Apple and Research in Motion (RIM), have proprietary OSs used across all of their devices.

MOS Differ in Several Key Ways:
• Costs—Some are free; others have licensing fees.
• Architecture—Some are open source; others are closed (although application development is still available on all mobile OSs).
• Features—Some allow advanced features and applications; others have a plug-in application approach.

Research Overview

This study discusses the market dynamics and technology trends that are shaping the mobile smartphone industry and its various OSs.

As mobility continues to be the norm in everyday life and business, end users are looking for more choices in the design, functionality, and capabilities of devices.
As demand for mobility continues to increase, smartphones are emerging as the logical fit. Feature phones are still being used, but the process has already begun in displacing feature phones with faster, smarter, and more capable smartphones.
This research provides a comprehensive analysis of the Latin American smartphone market, with a focus on the competitive environment of the handset.
This study discusses the major industry and market dynamics and technology trends that are shaping the smartphone industry. The research also provides market forecasts and strategic recommendations for vendors.

Market Overview—Latin America

Smartphone Market: Market Overview, Latin America, 2011
Number of Mobile Lines (Million): X
Penetration of Mobile Lines (% of Total Population): X
Number of 3G Subscribers (Million): X
3G Mobile Subscribers (%): X
Number of Smartphone Shipments (Million): X

Latin America has had Outstanding Growth in Smartphones Shipments, driven mainly by Brazil, Mexico, and Colombia. Smartphones represented around X percent of the total Latin American mobile handset shipments in 2011. By the end of 2011, the smartphone market had grown X percent in Latin America. Brazil and Mexico accounted for approximately X percent of total shipments. However, Venezuela has the highest penetration of smartphone handsets among the six countries.

Growth in the use of smartphones increased the penetration of mobile Internet services and contributed to the development of the data services market in the region. Argentina, Chile, and Colombia had noticeable growth due to economic recovery and competition among mobile operators willing to stimulate demand for data and content services.

The popularity of Apple’s device has revolutionized the smartphones market. Since the release of its first smartphone in 2008, the iPhone has been a must-have device in the portfolios of all major telecommunication companies, which have been developing specific data plans for its use.
The iPhone has had a crucial role in the consumerization of smartphones, which previously were relegated to the business segment. With the release of the iPhone 4S in Latin America earlier this year and the upcoming release of iPhone 5, Apple expects to increase its customer base.

With the popularity of smartphones, application markets are featuring programs that assist with personal and professional tasks, and these programs have become a key differential for manufacturers. Local technology service providers have gained importance, as they are responsible for developing applications and exclusive content for app stores. This has led the way for the growth of the development industry, which is more evident as manufacturers and telcos strive to make partnerships to become closer to developers. The number of technology service providers is expected to increase rapidly to supplement the demands of the Brazilian enterprise segment.

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