2011 Poised to Be 'Year of the Smartphone'

Business Insider makes the excellent point that there's a lot of headroom for smartphones at Verizon. That's equally true at the other US carriers. At Sprint and T-Mobile that's going to be mostly about Android and to a much lesser extent RIM. AT&T and Verizon will sell a lot of iPhones, perhaps a combined 15 million or more. 

Verizon said this morning that (only) 26% of all its 94 million subscribers are smartphone users. Interestingly, however, 75% of contract subscribers are buying smartphones. Thus overall smartphone penetration will grow dramatically this year at Verizon. AT&T has a higher percentage of smartphones, in excess of 35% penetration. 

Nielsen said in November that 28% of US mobile subscribers had smartphones and projected that number would rise to 35% at the end of Q4 2010. Given that the majority of new handset sales globally are from the ranks of smartphones it's likely that by the end of 2011 we will be very close to the anticipated "50% threshold" (overall US smartphone penetration).

When this happens it radically changes the entire marketing proposition for everyone. That would mean about 150-160 million smartphones. That would compare with just over 200 million US Internet users. General Internet growth is very small on a percentage basis year over year.

Picture 12

Morgan Stanley has projected that mobile Internet access will exceed fixed-line Internet access globally by 2014. I had thought it would take much longer for that to happen in the US  . . . but perhaps not.