July 23, 2013

For the mobile Internet, tomorrow belongs to Asia

Screen Shot 2013-07-23 at 10.49.40 PM.png After five years of explosive growth sales of high-end smartphones have hit a plateau and the $2 trillion industry - telecom carriers, handset makers and content providers - is buckling up for a bumpier ride as growth shifts to emerging markets, primarily in Asia. Jeremy Wagstaff and Lee Chyen Yee report for Reuters.

quotemarksright.jpgWhile carrier subsidies have helped drive sales of high-end devices in mature markets, the next growth chapter will be in emerging markets where cost-conscious users demand cheaper gadgets and cheaper access to cheaper services.

This year, the number of mobile Internet users in the developing world will overtake those in the developed world for the first time - growing 27 times since 2007, compared to the developed world's fourfold growth, according to estimates from the International Telecommunications Union (ITU).

"The center of gravity in the mobile ecosystem is likely to shift from the United States and Western Europe toward Asia," Mary Ellen Gordon, director at mobile advertiser Flurry Inc, said in an emailed interview.

That shift is a challenge to profit margins at the likes of Apple Inc and Samsung Electronics, which together sell half of the world's smartphones. Both companies announce quarterly results this week.quotesmarksleft.jpg

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