Smartphone Sales Near Saturation Point in Mature Markets: IDC

 
 
By Nathan Eddy  |  Posted 2013-11-27 Email Print this article Print
 
 
 
 
 
 
 

According to the report, worldwide smartphone shipments are expected to surpass 1 billion units in 2013, representing 39.3 percent growth over 2012.

Despite a number of mature markets nearing smartphone saturation, the demand for low-cost computing in emerging markets continues to drive the smartphone market forward, according to a forecast from IT research firm IDC’s Worldwide Quarterly Mobile Phone Tracker.

According to the report, worldwide smartphone shipments are expected to surpass 1 billion units in 2013, representing 39.3 percent growth over 2012. While a number of trends co-exist in the global smartphone market, none have more of an affect on driving market growth than the steady decline in average selling prices (ASPs).

By 2017, total smartphone shipments are expected to approach 1.7 billion units, resulting in a compound annual growth rate (CAGR) of 18.4 percent from 2013 to 2017.

"The game has changed quite drastically due to the decline in smartphone ASPs," Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker, said in a statement. "Just a few years back the industry was talking about the next billion people to connect, and it was assumed the majority of these people would do so by way of the feature phone. Given the trajectory of ASPs, smartphones are now a very realistic option to connect those billion users."

From a volume perspective, emerging markets including Asia/Pacific, Latin America and Middle East and Africa (MEA) will all post market-beating growth rates from 2013 to 2017. Similarly, from a price perspective, ASPs in these same emerging markets will post single-digit CAGR declines from 2013 to 2017, led by Asia/Pacific.

This will enable more users to afford smartphones for the first time, and in many cases, allow users to bypass purchasing feature phones altogether and go straight to smartphones. Developed markets, by contrast, will see market share erosion, but will nonetheless see volume increases during the same time period.

"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," Ramon Llamas, research manager with IDC's mobile phone team, said in a statement. "Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass-market users. Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience."

In 2013, IDC said it expects smartphone ASPs to be $337, down 12.8 percent from $387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to $265 by 2017, the report projected, thanks in part to the multitude of low-cost devices running Google’s Android operating system.

 
 
 
 
 
 
 
 
 
 
 
 
 

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