Growing smartphone market could hit 1 billion in annual sales by 2016

It's no surprise that the smartphone market is growing at a rapid pace. New data from market research company IMS Research says that 420 million smartphones will be sold this year, accounting for 28 percent of the global handset market. It's also no surprise that handset makers such as Apple are surging ahead while others, say Nokia and LG, are losing ground, as well as market share.
The research also shows that there is a growing opportunity for handset makers to develop entry-level smartphones -- devices that fall somewhere between a smartphone like the iPhone and so-called "dumb" phones. Adding these phones to the mix, IMS predicts that annual smartphone sales will surpass one billion devices by the end of 2016, accounting for one of every two mobile handsets sold.
IMS tracks quarterly market share and its latest report shows that, indeed, Nokia's market share has slipped from 40 percent to 24 percent in the last year. LG has also struggled to capture market share, though it is up 3 percent from 2010.
“But despite the higher margins for smartphones, and the seemingly insatiable consumer appetite for converged devices, it is clear that not all OEMs (original equipment manufacturer) are equally positioned to capitalize on this market trend,” said IMS analyst Josh Builta in the report.
Builta attributed the struggles faced by RIM, Nokia and LG to a failure to recognize and adjust to the growing smartphone market -- failures that include poorly designed devices, limited portfolios and unsatisfactory user interfaces.
The clear frontrunners are Apple and Samsung, which makes devices that run both the Android and Windows Phone operating systems.
According to Builta, “These companies are well positioned to benefit from the projected growth of the smartphone market in the future. Though the other OEMs are stepping up their efforts in the space, companies such as Apple, HTC and Samsung have a considerable amount of momentum. Catching them will not be an easy task.”