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Smartphone Adoption Accelerates

Research firm says smartphones will account for a majority of shipments two years earlier than expected

Smartphones are popular, no doubt. But today they still make up less than half the total market worldwide for cellular handsets, with low-cost basic phones and talk and text “feature” phones still attracting more buyers.

But that’s expected to change starting next year, says new research from IHS iSuppli. Driven by increased demand from developed regions for high-end models -- along with a strong push in emerging economies for lower-cost smart devices -- smartphones are expected to account for the majority of global cell phone shipments in 2013.

That’s two years earlier than IHS iSuppli previously predicted.

“This represents a major upgrade for the outlook compared to a year ago, when smartphones weren’t expected to take the lead until 2015,” said Wayne Lam, senior analyst at IHS iSuppli, in a statement. “Over the past 12 months, smartphones have fallen in price, and a wider variety of models have become available, spurring sales of both low-end smartphones in regions like Asia-Pacific.”

Smartphone shipments in 2013 are predicted to account for 54 percent of the total cell phone market, up from 46 percent in 2012 and 35 percent in 2011, according to the research firm.

By 2016, smartphones will represent 67.4 percent of the total cell phone market.

Feature phone market share is expected to drop to 41 percent of shipments worldwide this year, down from 46 percent last year. By 2016, feature phones are expected to be 28 percent.

A third type of phone, the entry-level and ultra-low-cost handset, is forecast to have 14 percent worldwide market share this year and end up with just 4.2 percent share by 2016.

IHS iSuppli said the smartphone market has two segments— high-end smartphones and low cost smartphones. Cell phone makers have been introducing affordable smartphones equipped with less memory and limited features in developing countries to use data plans. This segment of the market is expected to be the fastest growing through 2016.