By Patrick Avenell

Smartphone sales, especially of Android models, are currently booming, though price erosion is affecting the total revenue of the category, according to GfK Asia regional account director for telecommunications Gerard Tan.

Tan reported that during Q1 2011, there was a 6 per cent increase in sales volume in the smartphone category, though there was a 3 per cent decrease in sales value, highlighting how quickly premium products are becoming commodities in the current retail tech economy.

The Android operating system is responsible for much of this growth, with Tan saying that consumers are embracing the open format and easy-to-use functionality of the Google mobile phone OS, now up to version 2.3 (Gingerbread). Tan reported a 77 per cent growth in Android volume sales compared to the previous quarter.

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"Major manufacturers have been embracing the Android OS for their smartphones in recent times, thereby significantly increasing the variety of Android smartphone offerings to consumers in the markets,” he said. "At the same time, it helps that Android smartphones have become increasingly appealing to consumers due to its user friendly interface and wide range of applications available.”

For the future, Tan predicts an influx of entry level Android smartphones to drive volume sales. This has already begun in Australia with the release of comparatively cheap handsets by Telstra and LG.

"As the popularity of smartphones continues to soar, consumers can expect to find a wider range of more affordable smartphone models in the market as competition intensifies among the industry players.

"There are still lots of unexplored territories and definitely plenty more room for the smartphone industry to develop further. The continued proliferation of smartphones will spur aggressive consumer adoption, and this will keep on driving the mobile phone market in the next one year or so.”