Research and Markets (www.researchandmarkets.com) says their research shows that the global smartphone market will grow at a CAGR [compound annual growth rate] of 10% through 2016.

Commenting on the report, an analyst from the team said: "Global smartphone vendors such as Samsung and Apple make huge investments in their R&D divisions. One of the main reasons for this huge investment is the stiff competition among the smartphone vendors in the market. The increasing R&D investment enables the vendors to launch new, sophisticated, and appealing smartphones with advanced technology, giving vendors a competitive edge over other players. Therefore, increased R&D spending is an emerging trend that many global smartphone vendors are following to stay on top in the market."

According to the report, one of the major drivers is the continual decline in smartphone prices. Since the prices of smartphones have been constantly reducing, they are becoming more affordable to consumers thus, leading to an increase in the demand for smartphones. The reduced prices have also increased the adoption of smartphones in emerging markets such as India and China.

Hence, emerging markets are a huge potential for the growth of the global smartphone market, notes Research and Markets. Further, the report states that one of the key challenges for the market is the high cost of production of smartphones.

The intense competition in the market forces smartphone vendors to incur large investments that eventually affect their profitability, per the research group. Marketing and R&D are two major areas that vendors spend on considerably, thus, leading to high cost of production, adds Research and Markets.