Gradual Rise of Smartphones in Pakistan

Smartphones have taken the world by storm in recent years. Worldwide, smartphone usage has jumped 79% in the past year and around 450 million smartphones are expected to ship worldwide this year.

Here are the stats for the top smartphone vendors for the first quarter of 2011.

Despite this worldwide popularity, smartphones in Pakistan haven’t really picked up any steam. There are 105 million SIMs in operation in Pakistan right now and phone density is 63% (according to PTA, other estimates from different institutes provide a lower figure), but smartphone usage is limited.

Estimates suggest that smartphone share in Pakistan is 5 percent of the total mobile phone market (E Series from Nokia and Blackberries are counted in this).

That low penetration of smartphone is because of high prices of smartphones in Pakistan. In UK and other countries, the model adopted by network providers which is popular is contract based. So an iPhone 4 in the might cost around $199 dollars which translates to 17, 000 PKR on contract. But the same iPhone here costs around 55,000 PKR.

Those networks, for instance there in UK, offer the phones for cheap because they can recover their money and make a profit by the data plans offered in the contracts. The phones only run on the network with which you have a contract and these networks have huge user bases so even if they breakeven in the 17th month of a 2 year contract, they will still make huge profits.

This model is not suitable for an environment like Pakistan, so telecom companies here have done what they can.

Ufone and Zong have taken a good initiative to increase the popularity of the Android platform, which in many regions is already the number one platform for smartphones, by releasing an affordable series of handsets running the OS.

The cheapest of them, Ideos is available from both operators for a price of approximately PKR 10,500. Ufone further offers two more Android handsets, the Image and Verve.

Mobilink has also released smartphones into the market periodically.

Android is only going to grow in popularity in Pakistan with the help of affordable offerings from these operators, but these offerings also raise a few questions. Why aren’t other providers like Warid and Telenor stepping in this market?

The competition in the Pakistani market is tough right now, and naturally providers would be looking for any way to increase their market share and gain an advantage over their competitors.

That is, I believe, the reason we have seen the recent surge in handset offers from these providers. Seeing the popularity of Android abroad, Ufone and Zong have had the right idea to offer a phone running on Android for a low price and tap into, potentially, a big demographic.

Though all operators have released quite a few BlackBerry phones and they has given them a reputation for brands that cater to the business community, but changing trends suggest that Android is replacing blackberries.

Telenor also jumped in, providing the BlackBerry 9800 Torch and Nokia E7.

But the thing is these are relatively high end phones which not a whole lot of people can afford to buy.

The better deals for smartphones are only being offered by Ufone and Zong. And that too are very limited. They need to expand their inventory by introducing more handsets like the Ideos and if possible, at lower prices.

Others also need to take a note and cater to the younger mobile phone generation. Smartphones are big business, and it’s only a matter of time before Pakistan is caught up in their fever too. Only time will tell which provider comes out on top when it happens.

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