Android Devices Driving Shipment Volumes, iOS Drives Revenues

From an operating system perspective, Android devices will continue to drive shipment volumes while Apple iOS devices drive revenues, IDC found.

smartphones and IDC

Worldwide smartphone shipments will reach a total of nearly 1.3 billion units in 2014, representing an increase of 26.3 percent over 2013, according to a mobile phone forecast from IT research firm IDC.

From an operating system perspective, Android devices will continue to drive shipment volumes while Apple iOS devices drive revenues.

By 2018, Android will control 80 percent of global smartphones shipped and 61 percent of revenues, while iOS will control only 13 percent of volumes and 34 percent of revenues, the report projected.

"Apple should be concerned with everyone and everything, from Android all the way down to Windows Phone and BlackBerry," Ramon Llamas, IDC research manager for wearables, mobile phones, and smartphones, told eWEEK. "As popular as Apple is, it faces a multi-front battle not only in terms of volume--where Android plays--but also in terms of users; Windows Phone and BlackBerry still have some traction among enterprise users."

Llamas noted Apple does not appear to have a huge play in the low-end of the market like Android, and until it does, the main battle for Apple is at the high-end of the market.

Looking ahead, IDC expects 1.4 billion smartphones to be shipped worldwide in 2015 for a 12.2 percent year-over-year growth rate.

Slower annual growth continues throughout the forecast with unit shipments approaching 1.9 billion units in 2018, resulting in a 9.8 percent compound annual growth rate (CAGR) for the 2014–2018 forecast period.

Llamas said the outlook for growth in near future is very stable, as IDC is still anticipating double digit growth in the next few years.

In terms of market saturation, he said he doesn’t see the market approaching that level anytime soon, but there would be a more serious discussion around that topic to be had come 2020.

"We still expect strong growth in the phablet market going forward. A lot of vendors who had dipped their toes into the water have since left or postponed their phablet plans, and that allows opportunity for Apple to swoop in," Llamas said. "Plus, Apple has a rabid user base, so there's something to be said for how much of its own loyalists will upgrade."

Smartphone revenues reflect a starker picture, as they will be hard hit by the increasingly cutthroat nature of pricing, resulting in a 4.2 percent CAGR over the same forecast period.

On a worldwide basis, smartphones are expected to have an average selling price (ASP) of $297 worldwide in 2014, dropping to $241 by 2018.

Emerging markets like India will see much lower smartphone prices, as ASPs hit $135 in 2014 and fall to $102 by 2018.

"Prices will indeed [continue to] fall, and right now it is a race to the bottom," Llamas said. "Basements will vary by market, as emerging markets are popular ground for sub $100, and in mature markets, there's strong activity developing between $100 and $200."