Smartphones to Surge in 2010

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BARCELONA (Reuters) – The wireless chip industry expects smartphone market surge to continue, with British microchip designer ARM saying growth would likely even accelerate further next year.

The smartphone market slowed drastically in the September quarter, but chip makers — whose products are sold weeks, if not months, before phones are sold to consumers — said they were seeing strong market growth, indicating third quarter slowdown was temporary.

“Smartphones grew this year, and we are going to probably see faster growth next year,” Tim Score, chief financial officer of ARM, told the Morgan Stanley Annual Technology, Media and Telecoms Conference in Barcelona.

ARM’s designs are in 90 percent of mobile phones, including Apple’s iPhone and Nokia’s new top-of-the-range model N900.

Smartphone market has rallied since Apple introduced iPhone in mid-2007, raising consumers’ appetite for surfing the Web on the go.

“When things really started to get off was when Steve Jobs stood up and said: now you can get Internet in your pocket,” said Erik Harell, chief financial officer of Norwegian mobile browser firm Opera Software.

Joep van Beurden, chief executive of chip firm CSR said smartphone market volumes would grow around 20 percent this year.

“There is strong momentum in smartphones,” said also Carmelo Papa, chief of STMicroelectronics’ industrial division.

Next year falling smartphone prices are set to boost market growth as Nokia and Google push their operating systems — Symbian and Android — to cheaper phones where sales volumes are higher.

“2010 will see continued growth as manufacturers and operators seek to drive open platforms into the mass market,” said Geoff Blaber, analyst at research firm CCS Insight. “Android and Symbian will take smartphones into the sub-150-euros realm where feature phones have dominated to date.”

Nokia introduced its first smartphone priced at 150 euros in August.

China Mobile, the world’s largest mobile operator by subscribers, said last month it expects average smartphone prices to halve in 1-2 years.