ARC Group forecasts that worldwide shipments of high-end smartphones will reach 45m by 2007

London-According to the latest report from ARC Group, high-end smartphones will grow from less than 1% of total mobile handsets shipped in 2002 to 5% in 2007.

ARC Group expects annual shipments of these devices to grow from around 3.5m units in 2002 to 45m units by 2007. Nevertheless, during the next 5 years, the connected handheld market will remain a small segment of the total handsets market.

Smartphones, which were initially designed primarily as mobile phones with data-communications functionality along with advanced computing capabilities, have the ability to handle and host a number of applications letting them behave exactly like handheld computers. In 2002 high-end-smartphone shipments accounted for 0.3% of the total handset market and by 2007 this ratio is not expected to exceed 5%. But the value attributed to this market segment could be as high as 20% of the total handset market because high-end smartphones will offer extra features and functionality, and they will therefore remain more expensive than traditional handsets.

Symbian is currently the most used OS for high-end smartphones, with an overwhelming 60% share in 2002. However, Symbians worldwide share of this market is expected to decrease over the years, falling to around 39% by 2007. Palm OS currently holds the second position in the market rankings with a share of 22%. However with the emergence of the Pocket PC smartphone-edition in 2002, Microsoft OSs are likely to gain momentum and mainly eat into Palms share. The Palm OS market is expected to fall drastically to just under 5.5% in 2007. Microsoft currently holds third position in this market, with a modest share of 6.6% in 2002. MS OSs are expected to rapidly catch up with Symbian by 2007 with a share of 40%. Nevertheless, such high market share growth will very much depend on the alliances that Microsoft is able to forge with operators and device manufacturers around the world.

The author of ARC Groups Future Mobile Computing Report, Malik Saadi says: Sales of these connected handheld devices remain low to date for many reasons, including their relatively high cost, which makes it difficult for operators and service providers to balance device subsidies against the potential for increased data revenue streams." Other factors include their comparatively large size and heavy weight in comparison with traditional handsets, and their very short battery life due to the substantial energy consumption of the CPUs, communication modules and high-resolution wide screens - all necessary features for dealing with bandwidth consuming data applications and services.