This is the year that smartphone shipments will for the first time surpass shipments of feature phones. According to a report from NPD DisplaySearch, global smartphone shipments are expected to reach 937 million units in 2013, compared with just 889 million units for basic phones and feature phones.
Emerging markets are what are driving most of the smartphone growth, the report claims, due in large part to better download speeds as networks are upgraded to 3G and 4G networks. In these markets, entry-level smartphones priced below $200 are gaining momentum.
Overall, between 2011 and 2016 smartphone shipments will grow at a compounded annual growth rate (CAGR) of 26 percent, to 1.45 billion units, which will account for two-thirds of the mobile phone market.
"The global smartphone market is expected to continue growing rapidly over the next two years," Shawn Lee, research director at NPD DisplaySearch, said in a statement. "With larger, higher-resolution displays, faster processors and higher-capacity cellular systems being built, the smartphone is not only becoming a must-have device, but is satisfying many needs that formerly required other computing and consumer electronics devices."
At the high end of the market, Long Term Evolution (LTE)-enabled smartphones will represent nearly a quarter (23 percent) of market share in 2013. As this segment of the global smartphone market grows, the report projected that demand for several key features will increase as well.
Shipments of Active Matrix Organic Light Emitting Diode (AMOLED) and Low Temperature PolySilicon (LTPS) LCD panels for full high-definition resolution smartphones are forecast to increase significantly, from 1.7 million units in 2012 to 113 million units in 2013, according to the study.
On the other end of the market, China leads in the entry-level smartphone category, comprising 55 percent of shipments. China is also the largest market for smartphones as a whole, and the Asia-Pacific region will account for more than half of smartphone shipments in 2013.
"To increase revenue share and gain margin in the smartphone market, a variety of new handsets, as well as new products launched by service and content providers, will enter the market," Lee said. "As smartphone specifications and features become more advanced, and as device replacement rates increase, we can expect further investment in the industry by manufacturers, carriers and governments."
As more handset manufacturers like Samsung, Sony, HTC and others debut handsets with ever-larger displays (some upwards of 5 inches), panel makers are increasing production of smartphone displays in larger-generation LCD factories to meet the demand for these larger panels. This year, more than half (57 percent) of smartphone displays will range between 4-5-inches, while screens larger than 5-inches will grow to 16 percent of the market, according to the report.
On the software side, Google's Android and Apple's iOS mobile operating systems were the No. 1 and No. 2 smartphone operating systems, combining for a whopping 92.3 percent of worldwide smartphone shipments in the first quarter of 2013, according to a report released last week from IT research firm IDC. For the first time, Microsoft Windows Phone came in third, ahead of BlackBerry, the research firm found.