Smartphones Power Strong Growth in Mobile Phone Sales: IDC

Worldwide smartphone shipments are forecast to grow 40 percent year over year to more than 1 billion units this year.

Strong demand for smartphones across all geographies is expected to drive the worldwide mobile phone market to 7.3 percent year-over-year growth in 2013, marking a sharp rebound from the nearly flat (1.2 percent) growth experienced in 2012, according to the latest report from IT research firm International Data Corporation (IDC).

Worldwide smartphone shipments are forecast to grow 40 percent year over year to more than 1 billion units this year. The report noted high smartphone growth is the result of a variety of factors, including steep device subsidies from carriers, especially in mature economic markets, as well as a growing array of sub-$200 smartphones. Total smartphone shipments are forecast to reach 1.7 billion units in 2017.

"Smartphones will represent virtually all of the mobile phone market in many of the world's most developed economies by the end of 2017," Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker program, said in a statement. "Aggressive carrier subsidies of handsets, falling prices, higher consumer awareness and a vast array of devices will mean almost all phones shipped to the developed world will be 'smart.' However, smartphone shipment volume will be dominated by emerging markets, such as China, even though the percentage of smartphones to feature phones won’t be as high."

In fact, the overall mobile phone market is growing faster than previously forecast thanks to a stronger-than-expected first half of the year driven by strong gains in emerging markets and the sub-$200 smartphone segment. IDC analysts previously projected 5.8 percent growth for the year, but vendors are now forecast to ship more than 1.8 billion mobile phones this year, growing to more than 2.3 billion mobile phones in 2017.

"Two years ago, the worldwide smartphone market flirted with shipping half a billion units for the first time–to double that in just two years highlights the ubiquity that smartphones have achieved," Ramon Llamas, research manager with IDC's Mobile Phone team, said in a statement. "The smartphone has gone from being a cutting-edge communications tool to becoming an essential component in the everyday lives of billions of consumers."

The sheer volume of devices at a wide range of price points combined with Google's backing and a growing application library will keep Android atop the smartphone operating system (OS) heap, with Samsung remaining the world's top seller of Android-based smartphones. Apple’s iOS is projected to remain the clear No. 2 operating system, as the expected launch of a lower-cost iPhone will open up a wider addressable market.

Beleaguered BlackBerry will watch its share decline markedly over the forecast due to tepid BlackBerry 10 reception and emboldened competition that are expected to whittle away share in its remaining regional bastions of strength, such as Africa, Latin America and the Middle East, the report predicted.

Meanwhile, Microsoft’s Windows Phone platform is projected to solidify its position as the No. 3 OS with incremental share gains over the course of the forecast, due in part to the acquisition of Nokia’s device and services unit.

"Underpinning the smartphone market is an evolving market for operating systems," added Llamas. "What remains to be seen is how Windows Phone and BlackBerry's respective futures will play out pending their recent announcements. Windows Phone has inched ahead of BlackBerry during the first half of 2013, and we believe that will extend into the future. However, overall shipments will continue to trail those of Android and iOS."