Currently smartphones make up approximately one-third of all phones used in the U.S., with usage in other countries lower than 10%. But this may all start to change as we enter into 2011, which promises smartphones priced at under $100 and possibly as low as $75. Before you run down to your local retailer to get one of these cheap phones, it may not be for another 3 to 6 months before these phones become a reality. Smartphone sales have increased from 173M in 2009 to an estimated 269M for 2010.

The big news is that sales for 2011 could surpass 500M smartphones worldwide, when the new smartphones hit the street mid-year. These new smartphones will host a dual core ARM processor, Bluetooth, GPS, 5-megapixel camera and will use the Google Android operating system. Android is the ideal candidate for these low-cost smartphones with chips coming to us from Broadcom.

Currently Android activations top at about 300K activations a day. When these new smartphones hit the market, that number could increase dramatically. In one recent article it stated that:

“How cheap smartphones change the American cell phone market

Perhaps more importantly, at $100, many first-world shoppers will forgo the subsidized two-year contracts and instead choose month to month plans. That price point takes the power away from the carriers. If T-Mobile is having a special and I can just take my AT&T phone over without being hit with early termination fees, the carriers are much more likely to compete for customers.

Consumers used to feature phone monthly costs of $30/month may even opt to forgo wireless data altogether, instead choosing to use the smartphone’s built-in WiFi radio to surf near-ubiquitous WiFi in homes, at work and about town. To entice low-end smartphone users away from just using WiFi, carriers will have to make affordable data plans.

Cheap smartphones could change the way carriers price contracts here in the U.S.”

What is also being predicted for 2011 is that smartphone sales could surpass the sale of computers for the first time. As more people turn to mobile devices to meet their computing needs, the box computer or laptop could become an antique in a few years. These inexpensive smartphones could also eliminate the subsidy that phone carriers pass on with higher fees and could actually benefit the consumer with cheaper cell plans in the near future.

Here is a question that many of us will be asking ourselves in 2011. Is it time to make the switch and dump our old dumb phones?

What will your answer be?

Comments welcome.

Source – Fortune

Enhanced by Zemanta