Apple's iPhone will help drive the growth of smartphones in Canada

MONTREAL - Apple Inc.'s (NASDAQ:AAPL) sexy iPhone could be set for new heights in Canada, where smartphone sales have big growth potential and all major wireless players will soon be selling it.

MONTREAL - Apple Inc.'s (NASDAQ:AAPL) sexy iPhone could be set for new heights in Canada, where smartphone sales have big growth potential and all major wireless players will soon be selling it.

The California-based company said it sold a record 7.4 million devices in the July-September quarter, after it unveiled a faster iPhone in June and cut the price of the previous generation of the touchscreen phone to $99.

The surge suggests iPhone sales will continue to show similar rapid growth in Canada, where all three main wireless companies will soon be selling the sleek, multifunctional iPhone.

Rogers Wireless (TSX:RCI.B) has been offering the iPhone since July 2008 and Canada's two biggest telecom companies, Bell Canada (TSX:BCE) and Telus Corp. (TSX:T) have said they plan to offer it in November.

That could mean even higher sales for the device in the Canadian market where growth for such devices is still in its early stages.

"I think Bell and Telus are starting to sell it at a great time because consumer smartphone adoption is just picking up," IDC Canada analyst Kevin Restivo said.

Smartphone penetration was at 20 per cent of the Canadian market, he said.

"Apple is a primary beneficiary of the increased consumer smartphone adoption," said Restivo, senior analyst of mobility research.

Smartphones like the iPhone and Research In Motion's BlackBerry (TSX:RIM) allow consumers to surf the Internet, play music, watch video, check email and take pictures.

Their operating systems allow users to install software to do such things like read electronic books, play games and get stock trading information.

Increasing iPhone demand also means more competition for BlackBerry maker Research In Motion (TSX:RIM), which is also trying to get more consumers to buy its own smartphone.

The two are not exactly going head to head for the same market, being valued by consumers for different strengths: the iPhone for its user-friendly touchscreen, smooth web browsing and galaxy of applications; the BlackBerry for its rock-solid email management and seamless integration with business IT needs.

RIM and Apple may be No. 1 and 2 respectively in North America's smartphone market, but RIM co-CEO Jim Balsillie wouldn't comment directly on competition from the iPhone.

Balsillie said the company has always had competition from big technology companies like Nokia, Samsung, LG, Ericsson and Motorola - not just Apple.

"Our world is one of open standards and competition and because of the opportunities we always have big companies competing in this space," he told The Canadian Press.

"In technology, you have to be careful because there are direct competitors and so you have to innovate as fast as you can because, really, you get competition from many different directions."

Shares in Apple jumped more than 5.4 per cent on Tuesday on news that it had sold more iPhones than ever. Apple's profit jumped 47 per cent after delivering conservative guidance for the recent financial quarter.

Apple, based in Cupertino, Calif., reported it earned US$1.7 billion, or $1.82 per share, in its fiscal fourth quarter, which ended Sept. 26. That was up 47 per cent from the previous year. Revenue jumped 25 per cent to $9.9 billion.

PC Magazine mobile analyst Sascha Segan said iPhone demand is in full swing.

"Lots of people want iPhones on carriers other than Rogers," he said. "Once the carriers start competing on service plans and extras more people are going to want iPhones.

Segan said he doesn't anticipate a price war between the three carriers, but there could be shorter contracts and changes to monthly service plans.

"I think somebody is going to blink," he said from New York.

Restivo agreed that the jockeying for consumer attention could revolve around changes to monthly plans.

"Price wars aren't the Canadian way," Restivo said.

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