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Smartphone Growth Set To Slow

Smartphone Growth Set To SlowThe IDC’s Worldwide Quarterly Mobile Phone Tracker has forecast worldwide smartphone shipments will reach a total of nearly 1.3 billion units in 2014, an increase of 26.3 per cent over 2013, and 1.4 billion units in 2015, a 12.2 per cent increase year-on-year.

Slower annual growth will prevail through to 2018, with unit shipments approaching 1.9 billion, equating to a 9.8 per cent compound annual growth rate for the 2014-2018 forecast period.

Smartphone revenues, meanwhile, will be hit hard in an ever-competitive market, resulting in a 4.2 per cent compound annual growth rate through to 2018.

Worldwide, the IDC expects smartphones to have an average selling price of US$297 in 2014, dropping to US$241 by 2018.

“The impact of upstart Chinese players in the global market will be reflected in a race to the bottom when it comes to price,” commented Melissa Chau, IDC Worldwide Quarterly Mobile Phone Tracker senior research manager.

“While premium phones aren’t going anywhere, we are seeing increasingly better specs in more affordable smartphones. Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience.”

Chau noted that now the biggest question is “how much lower can prices go?”

Meanwhile, Android devices will continue to drive shipment volumes, while iOS devices will drive revenues: by 2018, Android will control 80 per cent of global smartphones shipped and 60.9 per cent of revenues, while iOS will control 12.8 per cent of volumes and 33.8 per cent of revenues.

Windows Phone will control 5.6 per cent of volumes and 4.2 per cent of revenues.

“As shipment volume slows, we expect greater attention to shift toward value trends,” commented Ramon Llamas, IDC mobile phones team research manager.

“Apple’s approach with premium pricing ensures a growing portion of overall revenues despite its declining market share. Meanwhile, Android’s multi-faceted approach – with forked versions and low-cost Android One strategy – will produce mixed results, yet it allows deeper penetration into emerging markets.

“That can lead to additional pressure on its vendor partners, who will need to seek greater differentiation in terms of devices and experiences in the hyper-competitive smartphone market.”