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Consumers increasingly want more sophisticated handsets, and smartphone sales are expected to grow 52% this year compared to last year, according to Gartner.
Overall, 190 million units will be sold this year, accounting for about 15% of the total handset market. In 2012, Gartner predicts, smartphone sales will reach over 700 million units, accounting for 65% of all handset sales. This will represent nearly $200 billion, Gartner said.
While smartphones have long had similar capabilities, Gartner said Apple's iPhone 3G has raised customers' expectations of what a handset can do.
"Apple's iPhone isn't huge in sales volume, but it helped energize the market," Carolina Milanesi, Gartner's research director for mobile devices, said in an interview with Dow Jones Newswire. "People are now walking into stores and asking for a smartphone, something that didn't really happen in the past."
The move toward open mobile operating systems will also have a significant impact on consumer adoption of smartphones, Garner said. In June, Nokia purchased the remaining part of Symbian and created the Symbian Foundation with the goal of creating an open, royalty-free Symbian operating system.
Symbian is already the most widely-used OS on smartphones and the open license could lead to it being deployed on even more smartphones. Gartner also sees other open-source operating systems like Android and mobile Linux leading to cheaper smartphones.
Additionally, increased competition from Chinese manufacturers like ZTE will make smartphones more accessible by driving down prices.
"Nokia has a strong foothold in the smartphone category already and that will continue to be the case, but others such as Research In Motion are working their way up," said Milanesi. "Going forward, Samsung is transitioning well toward smartphones, while LG is still struggling a bit. It is hard to say what Sony Ericsson will do, but we don't expect its Xperia X1 to make a big sales splash when released later this year."
Wireless carriers will also increasingly marketing smartphones to consumers because it allows them to receive more revenue from wireless data services.