Europe's Smartphone Growth is at Risk, finds Pyramid Research

Aug 17, 2009

Although smartphone sales in Europe are still growing, market participants must act now to minimize the recession's impact on smartphone sales and position smartphones for post-recession growth, according to a new report from Pyramid Research (, the telecom research arm of the Light Reading Communications Network (

Europe's Smartphone Market: Sustained Growth Is at Risk examines the impact that the economic downturn will have on European smartphone sales in the short and medium term, offering guidance to smartphone market participants on how to mitigate the effects of the economic slump and prepare for post-recession growth in Europe. This 14-page report provides Pyramid Research's five-year forecast on smartphone adoption in Europe and examines in more detail the market-positioning strategies of the leading smartphone vendors: Apple, Nokia, and Research in Motion (RIM). Download the excerpt here:

While Pyramid Research expects total handset sales to decline 21 percent in Europe in 2009, smartphone sales, driven mostly by market developments in Western Europe, will continue to grow robustly - about 22 percent year on year, notes Stela Bokun, analyst at Pyramid Research and author of the report. In CEE, however, Pyramid believes smartphone sales will fall 8 percent in 2009. "Even when the region's economy is doing well, device vendors and operators typically report much lower smartphone handset sales in CEE countries," she says. "Recently this situation has worsened significantly: Many CEE countries are seeing staggering GDP declines, significant currency devaluations and skyrocketing unemployment."

Smartphone market players should implement strategies that are more likely to maintain sales volume during the downturn and expand business once the economy improves. "If smartphones do not get cheaper, and if buyers continue to bear the full burden of currency fluctuations, smartphone uptake will suffer in a prolonged recession," Bokun says. While some Western Europe countries, such as Spain, have been severely affected by the recession, price adjustments are particularly needed in response to economic conditions in CEE markets. "Some vendors, such as LG and Samsung, have already addressed this situation by offering more affordable smartphones in some CEE markets," she adds.

Also, in the more developed Western European markets, smartphone applications will have to be compelling for smartphone uptake to remain unaffected by the deteriorating economy. Furthermore, if demand for advanced data services falls - and Pyramid Research does expect that the growth in revenue from data services will slow in 2009 - the need for smartphones is likely also to decline. "By focusing more on retaining their most lucrative customers - smartphone users - and encouraging these customers to use their mobile data networks, operators will keep their margins comparatively stable in the current economy and increase them once the economy improves," Bokun explains. "In other words, today's short-term survival strategy will turn into a winner in the medium term."

Europe's Smartphone Market: Sustained Growth Is at Risk is part of Pyramid Research's Europe Telecom Insider report series. This report is priced at $595 and can be purchased online here: or by contacting Amalia Vega via email at

Related Products:

Western European Mobile Handset Forecasts (

Forecasts published quarterly

Updated on a quarterly basis, our Mobile Handset Forecast products provide a complete picture of handset sell-through in each of France, Germany, Italy, Spain, and the U.K. The Excel output includes five years of historical data and five years of market projections for metrics such as total handset sales, handset sales by network technology, new handset sales (by technology, by technology generation, by feature set), smartphone handset sales, vendor market share, and handset ASP.

Smartphones in Latin America: Big Opportunities for Operators and Suppliers (

Telecom Insider published June 2009

This report examines the growth potential in Latin America's smartphone market and the key drivers by analyzing operators' and vendors' strategies. It provides Pyramid Research's five-year forecast on smartphone adoption in the region. Looking at vendor positioning, it focuses on three cases: Nokia, Research in Motion, and Apple.

For more information about Pyramid Research's products and services, please visit or contact us at

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Pyramid Research ( offers practical solutions to the complex demands our clients face in the telecommunications, media and technology industries. Our analysis is uniquely positioned at the intersection of emerging markets, emerging technologies and emerging business models, powered by the bottom-up methodology of our market forecasts for over 100 countries-a distinction that has remained unmatched for more than 25 years. As the telecom research arm of the Light Reading Communications Network, Pyramid Research works with Heavy Reading, providing the communications industry's most comprehensive market data, trusted research and insightful technology analysis.

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