Home > Smartphone market growth to slow; Android in 80% of phones by 2018

Smartphone market growth to slow; Android in 80% of phones by 2018

Editorial
article image ​THE smartphone market’s growth will slow as prices drop and markets mature, claim the International Data Corporation (IDC).

THE smartphone market’s growth will slow as prices drop and markets mature, claim the International Data Corporation (IDC).

The IDC Worldwide Quarterly Mobile Phone Tracker report shows worldwide smartphone shipments will reach a total of nearly 1.3 billion units in 2014, representing an increase of 26.3% over 2013.

Looking ahead, IDC expects 1.4 billion smartphones to be shipped worldwide in 2015 for a 12.2% year-over-year growth rate. While overall growth will continue, the growth rate will slow, with unit shipments approaching 1.9 billion units in 2018.

However, increased pricing competition will see revenue growth drop to 4.2% CAGR from 2013-2018.

According to IDC senior research manager Melissa Chau, the price race to the bottom is reflected in the emergence of upstart Chinese players in the global market.

“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 said.

On a worldwide basis, smartphones are expected to have an average selling price of US$297 worldwide in 2014, dropping to US$241 by 2018. Emerging markets like India will see much lower smartphone prices, as average selling prices hit US$135 in 2014 and fall to US$102 by 2018.

Average selling prices in mature markets are not expected to change significantly and modestly higher shipment volumes will not drive up overall revenues as each generation of flagship phones shows less and less differentiation from its predecessors.

By 2018, Android will control 80% of global smartphones shipped and 61% of revenues, while iOS will control only 13% of volumes and 34% of revenues. While Apple will suffer a declining market share, its premium pricing will enable it to still grow its overall revenues.

In such a market, newer operating systems like Tizen and Firefox will not be able to compete on price, but must bring a radically different appeal to gain any significant traction.

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