BBC: "Developing countries dominate mobile phone sales"

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Think phones are all about what's happening in Europe, America and Japan? Think again. According to the BBC, mobile phones are now overwhelming bought by people in developing countries. They quote a GSMA report which shows that 85% of the one million new mobile phone subscribers every day are from emerging economies, not rich ones. Mobiles also provide a secure banking and trading system in developing countries for people and businesses who have never had accounts before.

A London Business School study from 2005 quoted by the BBC indicates that as little as 10% market penetration of mobile phones can increase a developing country's GDP growth rate by a whopping 0.6%. A later study upgraded that figure to as much as 1.2% extra GDP growth. To put those figures into perspective, Tanzania's entire GDP growth rate in 2006 was 5.8%.

The mobile might still be a luxury to some, but it's now overwhelmingly a valuable economic tool to most people on the planet. Over 80% of Egyptian and South African businesses now rely on mobile phones, for example.

The days of mobile phones being novelties are long gone, and they are also now far more than just portable telephones. They are putting important economic facilities such as banks and trading exchanges in the hands of people and businesses who have never ever had them but desperately need them.


What does this mean for smartphones? 

Well, on the one hand they will have to drop significantly in price if they're going to attain a significant market share in the developing world. At the moment they still cost too much (although the price is definitely dropping, the Nokia E50 can be bought sim-free for just €180 plus taxes).

On the other hand, there may be an important economic development role for smartphones, especially if emerging economies are relying so heavily on mobile-based banking and trading. This role will get larger and larger as emerging economies emerge and have greater and greater amounts to spend on handsets.

As emerging economy businesses grow, they will want more sophisticated tools and equipment, an example of which might be a beefed-up phone capable of handling more complex transactions, storing and analysing previous transactions, keeping an inventory on supplies, and providing news on events happening in the marketplace. A smartphone, in other words.

It's not just about businesses either: if mobile-based banking becomes popular among individuals, people all around the world could come to regard their phone as a device for managing their money, and they might well appreciate something that can display more than just two lines of monochrome text.