Huge potential for smart phones in emerging markets

Smart-phone penetration in emerging markets is expected to increase dramatically from 2013.

Application stores are gaining ground in the emerging markets of Asia-Pacific, the Middle East, South and Central America and Africa as smart phone penetration increases and users seek a richer experience on their mobile devices.

In a new report, independent telecoms analyst firm Ovum states that the increasing penetration of smart phones, mobile broadband, and the ongoing reduction of service and device prices have translated into an expansion in the use of mobile applications in emerging markets. Operators regard app stores as a key factor in growing their subscriber base and driving network traffic.

Richard Hurst, senior analyst telecoms emerging markets at Ovum, said that smart-phone penetration in emerging markets is expected to dramatically increase from 2013, and this will have a significant impact on the app-store dynamic. The availability of low-cost Android, RIM and Nokia smart phones will see app stores becoming an increasingly important element of the distribution chain.

"Device and OS vendors will look to establish themselves as the leading providers of apps in emerging markets, emulating the position that they occupy in developed markets. However, in countries such as China, India, Brazil and South Africa, MNOs [multinational organizations] with strong app-store propositions will fight to defend their positions," said Hurst.

Smart-phone users are attractive targets for emerging market operators as they are early adopters and typically have a higher disposable income than average consumers.

However, the majority of applications in emerging market app stores are free or low cost as consumers have shown an unwillingness to pay for applications, concludes Hurst.