Smartphone Sales Taking Off in Latin America

One handset out of five sold in Latin America this year was a smartphone, according to the consulting firm Pyramid Research, and the trend is unlikely to stop here. According to Pyramid’s forecasts, by 2016, smartphone sales will account for 46% of all cell phone sales across the region.

While smartphone penetration is lower in Latin America than in other regions, it seems that the category has started to take off. According to Juliana Gomez, Senior Analyst at Pyramid Research, “Latin America’s smartphone sales picked up the pace in 2010 when smartphone sales in the region grew 117% and total handset sales grew 17%.” As a result, the share of smartphones among total sales has increased and will continue to do so, according to this graph:

On the operators’ side, smartphones are a huge opportunity to increase their revenues in a market where the mobile penetration already surpassed 100%. In this context, data represent a growing source of profit for mobile operators – see below the example of America Movil:

Since smartphone adoption is in their own interest, operators have come up with solutions to make these devices more appealing to their customers. One of them was to offer pre-paid 3G data plans, in a region where 82% of plans are pre-paid, according to Pyramid Research.

As in other markets, mobile companies have also worked on offering a larger variety of subsidized smartphone models. It’s no accident that operators’ strategy focuses on affordability. As Gomez pointed out, Latin Americans are heavy users of social networks and most of them would like to own a smartphone as long as they can afford it.

As a result, the research firm expects smartphone sales in Latin America to grow 75.7% in 2011, equaling 31m smartphone units sold and US$6bn in revenue.

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