Asia Pacific's 2 billion extra smartphones

Summary:The next five years are a good time to be selling smartphones, according to figures from Ericsson. In fact, with a threefold increase by 2019 over 2013's figures, Ericsson is probably kicking itself that they're not selling handsets anymore.

The action for smartphone vendors is particularly focused on this part of the world — Asia Pacific. According to data in this week's Ericsson Mobile Data Report, half the smartphones in the world are in our region. And between 2013 and 2019 an extra 2 billion smartphones will be connected.

Compare that to just 150 million new smartphone connections in Western Europe, and 11 million in North America, and you can see why vendors are salivating at the revenue potential from this part of the world. As Warren Chaisatien, Ericsson's ANZ head of marketing puts it, "through to 2019 more than one in two new mobile subscriptions globally will come from the region".

asiapac_phones
Image: Phil Dobbie/ZDNet

The opportunity is all to do with timing. Smartphones and tablets already account for more than three quarters of connections in the US and Canada, whereas more than half in Asia Pacific are still using basic or feature phones. There's also fewer people in North America, of course.

Beyond 2019, whilst equipment vendors in North America will work hard to flog replacement devices, the opportunity in Asia Pacific will continue to grow. Close to a third of the market will still be struggling on basic feature phones, with LTE penetration about the same percentage, leaving the way open for another 1.4 billion people to make the switch to the iPhone 11, or whatever is fashionable then.

It's not just the handset manufacturers that will benefit from the growth in Asia; smartphones change behaviour, pushing up demand for data, making LTE the technology of choice. That's good news for network vendors — so Ericsson are smiling after all.

The Mobile Data Report shows that 4.4 percent of devices on Asia Pacific mobile networks this year will be using LTE. In North America it'll be up to 43 percent. Fast forward to 2019 and almost a third of devices in Asia Pacific will be on LTE, and the US and Canada will be close to saturation at 85 percent. Western Europe, bizarrely, will be dragging its heels, with less than 50 percent of devices using LTE.

Naturally, it's data growth that will be pushing this demand, and video in particular. In Asia Pacific, Ericsson reckons data traffic will rise sevenfold from this year's usage to reach 9,000 Petabytes by 2019 — practically half of the world's total.

Network operators will be hoping tablets and dongles don't increase their share of devices too much — worldwide this year, they will account for 5 percent of subscriptions but 39 percent of data traffic. By 2019 those ratios won't have changed much, except in Asia Pacific where 6 percent of subscriptions will be on tablets and dongles, but accounting for just 35 percent of traffic.

For vendors, operators, and phone providers, Asia is the perfect trifecta — lots of demand for devices, and the need to build new networks, but thankfully, slightly less hunger for data per user than some of the established markets. With its impending golden NBN handshake and its expertise in building one of the world's fastest mobile networks, this all stacks up as a massive opportunity for a cashed-up Telstra, surely. In five years Australia should be nothing more than a branch office.

Topics: Mobility

About

Phil Dobbie has a wealth of radio and business experience. He started his career in commercial radio in the UK and, since coming to Australia in 1991, has held senior marketing and management roles with Telstra, OzEmail, the British Tourist Authority and other telecommunications, media, travel and advertising businesses.

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