Which Came First: Smartphone Sales Or Mobile Data Usage?

A new analyst report says that the adoption of mobile data services is growing in developed markets, fuelling a rise in the sales of smartphones that can support them. This sounds like a chicken-and-egg argument: are the smartphone sales driving data adoption, or data adoption driving smartphone sales? It seems more likely that the increase in smartphones is driving the increase in data sales, given that many of the new services cited — music downloads and mobile TV, for instance — can’t be accessed from older phones or non-smartphones. Getting new handsets that can support new services into people’s hands is fundamental to their success. Most often, this means increasing the subsidy operators put on new handsets, which carriers have said for some time they want to reduce. The subsidies look like they’re key to driving sales of handsets, and in turn uptake of new services. But does the added subsidy expenditure get offset by new service revenues? That remains doubtful.

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