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After a period of depressed demand, the global handset market is showing signs of recovery. At end-2009, the handset market was estimated to have grown by 10 per cent over 2008, arresting the contraction it had faced in the previous four quarters. The upturn, according to market analysts, was chiefly supported by a surge in demand for mid-range smartphones in the second half of 2009.

Handset vendors, taking advantage of the increase in demand, upped their smartphone shipments and consequently, their market shares. According to research firm Strategy Analytics, Nokia shipped 67.8 million smartphones, Research In Motion (RIM) shipped 34.5 million while Apple accounted for 25.1 million smartphone shipments during 2009. By end2009, global smartphone shipments had reached an all-time high of 173.8 million units, growing by 15 per cent from 151.1 million units during 2008.

According to industry analysts, at end-2009, Nokia retained its leadership position in the handheld segment after ramping up its smartphone portfolio, especially touchscreen phones.

In late 2009, Nokia sold four new touchscreen smartphone models in addition to the three existing ones. In the quarter ended December 2009, the Nokia E 71 and E 72 were the vendor's best-selling smartphone models.

Globally, Nokia has been leading the handheld segment, followed by Samsung, LG Electronics, Sony Ericsson and Motorola in that order. In the smartphone segment, Nokia had the lion's share of 39 per cent, followed by RIM with 15.5 per cent and Apple, Inc. with 14.4 per cent as of December 2009.

Surprisingly, the iPhone's performance has been disappointing. According to media reports, ABI Research believes that the device is beginning to "look a little tired". The research firm estimates that while Apple's sales had grown in the second half of 2009, the numbers failed to keep pace with the increase in overall smartphone sales during that time.

Established companies like Samsung and LG Electronics are planning to expand their application stores while emerging players like Dell and Huawei are strengthening their device portfolios and courting the major operators. This will intensify competition and lead to a further drop in smartphone prices.

While this is good news for users, this trend will put more pressure on the margins of handset makers, especially the new players who are coming up with innovative devices and aggressive pricing.

However, this demand was mostly restricted to the low-cost, music and business handhelds. The demand for smartphones is still at a very nascent stage in the country. Out of India's total handset shipments, smartphones comprised only 0.48 million. However, the situation is expected to change with the market share for smartphones likely to touch 9.5 per cent by 2011. According to a senior analyst at Pyramid Research, Brazil, India, Turkey, and Nigeria will be the fastest growing smartphone markets of the world in the next five years with compounded annual growth rates of 43 per cent, 39 per cent, 37 per cent and 34 per cent respectively.

The top three smartphone vendors in India are Nokia, HTC and RIM. Together, they accounted for nearly 90 per cent of the Indian smartphone market in terms of unit shipments during JulySeptember 2009.

Analysts believe that high pricing has hindered the demand for smartphones in India. Being expensive, they are accessible only to certain sections of society. However, devices such as the BlackBerry have found a significant number of users.

While smartphones have found many takers globally, they still have some distance to cover in India. However, given the pace at which the Indian telecom market is growing, smartphone demand is certain to pick up soon.