EXECUTIVE SUMMARY

This months series:

History How the market has evolved since the first PDA, the Pilot 1000, was launched in 1996. Advances planned for corporate services How the new technologies aim to make the virtual office experience completely normal, matching the desktop experience.

TELECOM

INTELLIGENCE SERIES

September 2007

Smartphones are here

Peer pressure to have the latest, flashiest mobile phone is as strong among Latin American businessmen as it is among their children. But one difference is that the businessman will almost certainly opt for a smartphone, and these premium devices appear to be gaining ground in the region. Argentina provides a good example of this trend, since the number of tech savvy SMEs that have incorporated smartphones into their hardware pool has increased from 4% in 2005 to 12% in 2006, and is expected to reach 44% by the end of 2007, according to a recent report by Argentine consultancy Carrier y Asociados. In fact, Carrier points to a global trend whereby sales of unconnected PDAs are declining due to the preference for connected units. Indeed, in Chile at least, the retail price of low-end unconnected PDAs has practically halved in the last two years. The report also states that many Argentine executives are actually ditching their laptops when they travel, and relying solely on their smartphone. Furthermore, uptake by SMEs shows that smartphone vendors do not need to rely purely on sales to executives in large corporations, and the inclusion of entertainment applications such as photo and music libraries suggests that smartphones could also have a place in the consumer market. In this report, BNamericas aims to look a little deeper into this smart phenomenon, evaluating the role of the smartphone from the operators point of view and examining their potential for mass appeal in this region.

Beyond the corporate sector How the use of smartphones has expanded from large corporate accounts to SMEs, individual entrepreneurs and young professionals.

iPhone A device by Apple that has been hailed by analysts as an attempt to create a new class of smartphones aimed at ordinary consumers. More applications, but less traffic? How data applications are seen as a way to increase ARPU but at the risk of cutting voice revenues even further. 3G crossroads How 3G migration in Latin America could impact smartphone sales. Conclusion The increased proportion of premium devices seen in handset sales comes as confirmation that smartphones are gaining a significant place in operators portfolios. Chile stands out

Preferred Mobile Data Device

100% 80% 60% 40% 20% 0% 4% 2005 Smartphones
Source: Carrier y Asociados

88% 73% 44% 47%

12% 2006 2007 Notebooks

in the region in terms of smartphone penetration, but even though the rest of Latin America is unlikely to boast these estimated levels of penetration, the regions newspapers fol-

lowed the launch of the iPhone as closely as press in the developed world and this has almost certainly helped promote the idea of the smartphone to a public beyond the readership of

specialized magazines.

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