The battle for the smart-phone’s soul

Brace yourself for disappointment: there may not be a flashy new mobile phone waiting for you under the Christmas tree. On November 14th Nokia, the world’s largest maker of such devices, announced that it expects the industry to sell no more than 330m of them in the fourth quarter — about 6m fewer than in the same period last year and 20m fewer than it predicted just a few months ago. Worse, Nokia expects sales in 2009 to drop below this year’s level. This would make it only the second year ever in which the global handset market has contracted.Yet not all is doom and gloom in the mobile-phone industry. On the contrary, it is going through two important shifts that promise to generate much growth and profit in the years to come. First, even though overall sales may fall in 2009, sales of “smart” phones — those that allow you to surf the internet, download music and use other data services, as well as make calls and send text messages — are booming. According to Informa, a market-research firm, the market for smart-phones will grow from $39 billion in 2007 to $95 billion in 2013, by which time they will make up nearly half of the handset market by value (though only 34% by volume).To read this article in full in The Economist, see www.economist.com/business/displaystory.cfm?story_id=12650273.

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