Smartphone Growth in 2014 to 'Drop More Significantly Than Ever': IDC

 
 
By Michelle Maisto  |  Posted 2014-02-26 Email Print this article Print
 
 
 
 
 
 
 

Market saturation and the new standards of the newest growth markets will turn the smartphone world on its ear this year, says IDC.

The global smartphone market is entering a new phase, IDC reported Feb. 26. After a 2013 in which smartphone shipments for the first time exceeded 1 billion units and the overall market grew more than 39 percent year over year, growth is expected to decline significantly.

"Despite the high growth expected in many emerging markets, 2014 will mark the year smartphone growth drops more significantly than ever before," IDC said in a statement. "2014 volumes are expected to be 1.2 billion, up from 1 billion in 2013, representing 19.3 percent year-over-year growth."

In 2017, shipments are expected to slow to 8.3 percent annual growth and in 2018 to 6.2 percent.

In addition to declining growth, the driving forces behind smartphone adoption are changing. New markets "bring different rules to play by and 'premium' will not be a major factor in the regions driving overall market growth," said the report.

In 2013, the average selling price for a smartphone (worldwide) was $335. By 2018, that price is expected to be $260.

"In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down," Ramon Llamas, a research manager with IDC's Mobile Phone team, said in the statement.

"Last year we saw a total of 322.5 million smartphone units ship for under $150 and that number will continue to grow going forward. We've already seen numerous smartphone announcements targeting this priceband this year, with some as low as $25."

Nokia and Samsung have been aggressive in their low-cost offers to emerging markets.

At the Mobile World Congress trade show Feb. 24, Nokia—despite its handset business now being owned by Microsoft—introduced a lineup of affordable Android-running smartphones. A family of Nokia X phones will go on sale immediately in Asia-Pacific, Europe, India, Latin America, the Middle East and Africa, starting at approximately $120.

Nokia's newest and most affordable full-touch Asha phone, the 230, will be priced at approximately $60, and the Nokia 220, an Internet-focused phone connecting users to social networking apps, will be priced at around $40.

BlackBerry also used the trade show to introduce a smartphone designed specifically for Indonesia. The Z3, code-named "Jakarta," is 3G-enabled and will be priced under $200, unsubsidized.

In China, the world's largest smartphone market, Samsung is the top-selling vendor, but Chinese brands, such as Lenovo—which in January purchased Motorola from Google—have an exceptionally strong presence.

IDC expects Android to maintain its lead as the top-selling OS worldwide. The firm expects 950.5 million units to ship this year, with growth to 1.3 billion by 2018.

"What remains to be seen," said the firm, "is which vendors will win the contest within emerging markets, as many local vendors have gained share last year."

Apple's "tight focus" on the high end of the market could prevent iOS from enjoying stronger sales than it might in emerging markets, but strong sales in mature markets will make up the difference, said IDC, forecasting sales of 179.9 million iOS units in 2014 and 249.6 million in 2018.

IDC believes that Windows Phone, with support from Nokia and nine new partners, has the potential to show the fastest growth over the forecast period, while on BlackBerry it's conservative, saying that company's strongholds within emerging markets "will be under constant attack."

IDC expects shipments of Windows Phone smartphones to reach 47 million in 2014 and 121.8 million in 2018, and shipments of BlackBerry smartphones to total 11.9 million in 2014 and 5.3 million in 2018.

 

Follow Michelle Maisto on Twitter. 

 
 
 
 
 
 
 
 
 
 
 
 
 

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