One Billion Smartphones by 2016: Here Comes the Mobile Arms Race

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It’s no secret that mobile is rapidly becoming the new battleground of the tech arms-race. Today, many pocket-sized digital devices pack more computing power than most desktop machines did a decade ago. Now, Forrester Research has come out with a new report that puts some numbers on the coming mobile explosion. The headline figure is perhaps the most striking: By 2016, just four years from now, one billion consumers will have smartphones, according to the research firm. In the U.S. alone, consumers will own 257 million smartphones and 126 million tablets.

The study highlights the shift from simple, so-called “feature phones” — like those basic, clam-shell models we all had a decade ago — to sophisticated units like Apple’s iPhone and devices running Google’ s Android mobile operating system. And as smartphone usage grows, so will the the “app economy,” which has already created nearly 500,000 jobs in the U.S., according to a recent study by economist Michael Mandel.

By 2015, the total amount consumers and businesses spend on mobile devices, software and services related to the mobile ecosystem will be an astonishing $1.3 trillion — and mobile apps alone will account for $55 billion, according to Forrester.

(More: The “App Economy” Estimated to Contribute Nearly Half a Million Jobs to the U.S.)

Who will dominate the mobile space? The study found that Apple, Google and Microsoft will be the platform for over 90% of smartphones and tablets worldwide. Apple’s iPhone and iPad are already the hottest mobile devices on the planet. Meanwhile, Google’s Android mobile operating system is spreading like wildfire — Google officials recently revealed that over 700,000 Android devices are activated every day. The New York Times has an interview with one of the authors of the study, Ted Schadler, a principal analyst at Forrester.

“Mobile is the new face of engagement,” Mr. Schadler said. “Businesses should stop thinking about it as a small Web site on a tiny computer, and start thinking about mobile as being deeply embedded systems of engagement. That turns out to have huge implications.”

Take, for example, Target, the retail store. If a customer walks into Target and has bought baseball gear in the past, the ideal Target mobile app will know when he is standing in the sporting goods section and will be able to tell him about a discount on a new baseball mitt, Mr. Schadler said. That’s more customized and engaging than a mobile version of the Target Web site.

In a separate study that echoes the Forrester findings, research firm NPD reported this week that tablets, e-readers and mobile phones were the big market-share winners among consumer electronics last year.