Mobile Computing | News

Report: Smartphone Shipments To Top 1.25 Billion on Strength of Emerging Markets

More than 1.25 billion smartphones will be sold in 2014, an increase of nearly a quarter over the previous year's 1.01 billion sales, according to a new forecast from market research firm International Data Corp. (IDC). By 2018, the company predicts smartphone shipments to reach 1.8 billion units.

The bulk of the growth this year and into the near future will come from emerging markets, according to the company. Emerging markets have accounted for 50 percent of smartphone sales growth since 2011, though until this year mature markets have contributed double-digit growth from year to year. IDC indicated that it expects that growth to slow to just 4.9 percent in 2014 and a meager 2.7 percent by 2018, while emerging markets grow 32.4 percent from 2013 to 2014 and trail off to 8.3 percent year-on-year growth by 2018. Total year-on-year growth in the segment will dip from 23.8 percent in 2013 to 7.1 percent at the end of the forecast period.

That growth will bring units sold to emerging markets to 920.8 million this year, "accounting for 73.5 percent of all volume shipped," according to a news release. "The catalyst here continues to be Android devices, which are expected to account for 88.4 percent of this volume. IDC's outlook for emerging market smartphone volume is 1.4 billion units by 2018, growing to 79.5 percent of worldwide volume."

 
Shipments of smartphones will growmostly on the strength of emerging markets through 2015, though developed markets will remain a significant source of revenue owing to a higher average selling price, according to a forecast by International Data Corp.
 

"The support that Google's Android platform has received from over 150 handset manufacturers has allowed it to gain the share it has in emerging markets," said Ryan Reith, program director at IDC's Worldwide Quarterly Mobile Phone Tracker, in a prepared statement. "The lack of constraints around hardware and software specifications has helped bring to market many low-cost products, a lot of which could be considered borderline junk. With Google's recent announcement of Android One, they hope to change this by laying out a set of standards for manufacturers to follow."

Despite the slowdown in units shipped, mature markets are still a significant revenue source, with the average selling price (ASP) of units more than $400, as compared to an ASP of less than $250 in emerging markets, according to Ramon Llamas, research manager at IDC's Mobile Phone team.

"The other widely discussed trend has been the shift towards large screen smartphones," according to a news release. "IDC expects 'phablets' (smartphones with 5.5"-7" screens) to grow from 14.0 percent of the market in 2014 to 32.2 percent of the market in 2018. With the expected entry of Apple into this market segment, and the pent-up demand for a larger screen iPhone, Apple has the ability to drive replacement cycles in mature markets despite the slower growth seen in recent quarters."

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