BRAZILIANS ARE GENERALLY REGARDED AS naturally communicative and social people. When a foreigner first arrives in the country, he or she usually notices how much the locals try to carry on a conversation, even though language might be a barrier. This tendency to talk is reflected in the growth of smartphone sales in Brazil. In 2011, 9 million of the mobile devices were sold in the country, which was 84% more than the previous year, according to data from IDC, the analysis and consulting company. Worldwide the growth rate was a mere 64%.
IDC says there are a few factors that help explain the rapid rate of sales in Brazil: the bigger portfolio of devices offered by phone manufacturers, better packages of data made available to clients by the phone service companies, and the considerable subsidies provided by the operators. The four biggest phone operators in Brazil today are Vivo, Claro, Oi, and TIM.
As the country’s economic situation has improved, more Brazilians have better jobs, and a considerable portion of society is able to buy a smartphone and pay the bill. Many of those smartphone buyers do not even consider having a landline phone anymore. Today there are 126 cell phones for every 100 Brazilians, while the proportion of landline phones is 43 for every 100, according to Teleco, a telecommunications consulting company. There are, today, 247,618 million active mobile phones in the Brazil, counting all types of devices.
Even though the raw number itself is impressive, that does not mean all those Brazilians are spending lots and lots of money on phone services. About 82% of those active mobile phones are using a pre-paid cell phone, for which broadband services are hardly ever sold. Many of those phones are used just to receive calls – in Brazil, whoever dials the call, no matter from what type of line, will be the one paying for it. There is no statistic about how much those users spend a month, but is certainly not as much as those with post-paid lines. Many of the smartphones included in the IDC numbers might be used simply to make quick phone calls or to take pictures, things that a good regular cell phone could do as well, but costing a lot less.
“Today there are several devices with more accessible prices, data packages even for pre-paid phones, and a high demand related to social networks and mobility. That boosts the sales of smartphones and the migration from regular phones to smartphones, which means that we will have a very heated market in that segment this year,” says Bruno Freitas, market analyst at IDC Brasil.
The company predicts that, in 2012, there will be 15.4 million smartphones sold, a number 73% higher than last year. “In 2011, Brazil has gone from 16th in world ranking for the sales of smartphones to the 10th position. According to our studies, in 2016 the country will be in the 4th position on this list,” says Freitas. Devices that use Android as the operating system were, in 2011, half of the total smartphones on the street, while in 2010 they accounted for only 15%.
For a post-paid cell phone, depending on the plan made with the operator, and how much the client is willing to pay on a monthly basis in data and voice services, the smartphone may cost nothing. But Brazil is known for its high prices when it comes to technology: a new iPhone 4Sm 16 GB, for example, has an average price of R$2,199 (US$1,120), a Nokia N8 may cost R$817 (US$441), and a BlackBerry Bold 9700 averages R$899 (US$485).
For the next few years, IDC predicts that this market will continue to show impressive numbers and growth rates. Investments in 4G services, which permit much faster exchance or data, are planned for 2012 and 2013 and probably will contribute to the whole mobile market throughout the country. In 2014 a few capitals that will host games of the Soccer World Cup should already have 4G services available.
Besides that, IDC says, the government intends to include smartphones in a program of tax incentives. This could attract the interest of manufacturers and stimulate the local production of such devices, as has been done recently for personal computers and tablets. There is no forecast as to when those benefits might appear, though.