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Smartphones in the US – Once you’ve had Android there’s no going back

Most people that we meet who are not in technology, wonder at how we keep up with the speed at which technology changes, but technology and technology

By PETER WHITE

Published: 4 November, 2010

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Most people that we meet who are not in technology, wonder at how we keep up with the speed at which technology changes, but technology and technology markets in particular, are sometimes glacial in the speed of change.

Back in around 2002, when we first talked about 3G licenses, and ooh-ed and ahh-ed at how much money they cost to buy, we thought the world was about to begin a ramp up in smart phones. It didn’t.

But now almost 8 years later, we begin to see what all the rhetoric was about back when the licenses were issued, just as we are on the verge of 4G investment. It’s strange that the US, which was light years behind Europe, which itself was light years behind Japan, is the hotbed of where this change is finally coming from.

Partly this is due to the fact that like Japan, in the US, handset control is more firmly in the hands of operators rather than consumers. In Europe operators tend to take a wider variety of handsets, and let the consumer decide. There are plentiful retail operations which are independent and which are not owned or controlled in any way by the operators, and they sell a huge chunk of all contracts. In the US the operator owned stores and the rivalry between operators, means that fewer phones have large chunks of advertising money pumped specifically into them, and they are “hyped” on an unsuspecting public.

But it is also the passion with which US individuals take up Social Networks which is driving data usage and the need to have these experiences integrated onto handsets, so they can be engaged in continually.

A report this week from Nielsen shows just how much acceleration towards smart phones the US has generated. Already it is now 28% of the US cellphone market, defining smart phones as cellphones with operating systems resembling those of computers.

But what is really interesting is the rate at which new contracts or phones are being acquired which use a smart phone. Over the past six months this has risen to 41% of all people getting a new phone.

The US was the country where the mobile phone was invented but Europe created the first widely accepted standards and dramatically overtook the US in handset penetration and usage during the 1990s. This jump in smart phones already puts the US back on track with say the UK, says Nielsen, but points out that in Spain, smart phones penetration is already as high as 37% and in Italy it is 33%. The difference is that Symbian is still driving these experiences.

What that means in turn is that brand loyalty, in particular to Nokia and probably Sony Ericsson as well, is holding up – for now. This is most likely a simple case of the UK having had longer contracts for longer, and there not being enough new handset contracts being signed to overturn feature phones and focus on smart phones. The operators in the UK are stingy and have always tempered attracting new customers with deals that tie them in for longer.

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