Growth of smartphones and mobile internet use
A key characteristic of the communications market in the past year has been the growth in take-up of smartphones. The chart below details sales data collected by GfK, which indicate that smartphone sales nearly tripled between Q1 2009 and Q1 2011. By the first quarter of 2011, around half of new handsets sold were smartphones (note that in this analysis smartphones are defined by the operating system – this may be a more restrictive definition of smartphone than is used elsewhere in this report, where smartphones are defined more by functionality).
It is likely that the demand for smartphones, particularly among younger users, has played a role in the increasing take-up of pay-monthly contracts, as users repay much of the cost of an expensive handset over a 24-month contract. In addition, as internet access on mobile phones becomes more widespread (we find that 36% of mobile users claim to access the internet on their mobile phone – see Section 4.1.2 of this report), pay-monthly tariffs may be more attractive than pay-as-you-go tariffs, as the majority of post-pay tariffs now include some element of bundled data use.