Jul 27, 2011 18:01 GMT  ·  By

With sales of smartphones increasing fast, the market is expected to reach new heights in the coming years. By the end of 2016, sales will surpass 1 billion units, a recent report from IMS Research, leading independent provider of market research and consultancy to the global electronics industry, shows.

The company notes that smartphone sales will reach only 420 million devices in 2011, which will account for around 8 percent of the total mobile phone market.

However, the research firm also notes that a wide range of affordable smartphones will arrive in the near future, and that they will drive sales of such devices upwards really fast.

“But despite the higher margins for smartphones, and the seemingly insatiable consumer appetite for converged devices, it is clear that not all OEMS are equally positioned to capitalize on this market trend,” says Josh Builta, analyst in IMS’ Mobile Technologies Group.

“For instance, LG, despite being the third largest OEM in the world, has offered a fairly limited smartphone portfolio in recent years, a factor that resulted in the company reaching less than a three percent share of the total smartphone market in 2010.”

Nokia is the handset vendor who has lost a lot of market share in the smartphone area, which also determined it to move from Symbian to Windows Phone.

For example, the company posted smartphone sales of 16.7 million in Q2, 34 percent lower than in the same time frame a year ago.

The research firm note that this is mainly due to the fact that the company did not manage to adapt to the competing environment in the smartphone area.

“The reasons for these failures vary and include everything from poorly designed and manufactured devices, unsatisfactory user interfaces, and portfolios that don’t offer products with a differentiating feature,” Builta explains.

While Nokia went down, companies like Apple and HTC enjoyed fast growth. Samsung is another handset vendor which significantly increased its presence on the smartphone market lately.

“These companies are well positioned to benefit from the projected growth of the smartphone market in the future. Though the other OEMs are stepping up their efforts in the space, companies such as Apple, HTC and Samsung have a considerable amount of momentum,” Builta continues.