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Smartphone Use in Emerging Economies: A Portal to Prosperity

by Kenneth Murphy

October 10, 2012

By Ken Murphy.

Several factors look to make 2013 a watershed year for the smartphone, but perhaps the biggest is their increased demand in emerging economies. According to a few recent reports that take a closer look at this growing smartphone demand, businesses that merge their mobility and globalization strategies to capitalize on the trend will likely not be lacking potential new customers.

Just how fast is smartphone demand accelerating globally? Market researcher IHS iSuppli predicts that smartphones will have eclipsed feature phones to account for the majority of global cellphone shipments by the end of next year – two years earlier than anticipated. (The forecast: smartphones will account for 54 percent of the total cellphone market next year, up from 46 percent in 2012 and 35 percent in 2011). The market share report cites a stronger than expected demand from emerging economies for lower-cost products as one of the factors driving that acceleration.

Results from the Accenture Mobile Web Watch survey, released Tuesday, suggest that demand for smartphones in emerging economies is driven by the desire for Internet access. A case in point is South Africa, where 57 percent of respondents reported that they intended to purchase a web-enabled phone in the ‘near future’ – 9 percent more than respondents across all 1 3 countries surveyed. (The survey polled consumers in 13 countries across Europe, Latin America and South Africa using a sample representative of Internet users across age, gender and incomes.) 

Other research confirms that South African smartphone owners didn’t buy a device only so they could ditch their landline, but to access data online. A Mobility 2012 research study conducted by World Wide Worx reports that the average South African cellphone user’s spend on data increased 50 percent from the end of 2010 to the middle of this year, from 8 percent of total budget to 12 percent. Over the same time period, those same users cut spending on voice minutes from 77 percent to 73 percent.

“Spend on data is a barometer for the rapid increase both in the number of Internet users in South Africa and in the intensity with which experienced users engage with the Internet,” says Arthur Goldstuck, managing director of World Wide Worx, which released its findings in late July.

Businesses in these emerging markets that recognize this increasing use of smartphones for data transfer and transactional activity can position themselves to make transformational changes. One company that recognized early how it could benefit from mobile growth was Standard Bank, which is headquartered in Johannesburg, South Africa, and – with 15,000 employees and operating in 18 African countries – is the largest bank on the continent. Realizing they couldn’t bring brick and mortar banks to large swaths of the rural population in South Africa, Standard Bank harnessed the power of mobility to bring banking to the masses, so to speak.

As this insiderPROFILES story describes, a year ago Standard Bank deployed the SAP for Banking industry solution on the Sybase Unwired Platform to enable the origination of accounts on a mobile device in about eight minutes. The result is Standard Bank is originating more than 7,000 new accounts per day, and hopes to put a dent in the poverty level across Africa.

It’s a great example of how one company recognized a trend and capitalized on it for both their own benefit and that of their customer base.

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