The global smartphone market is maturing, with growth rates projected to slow down this year as developed countries near smartphone saturation. In the United States and Western Europe, smartphone shipments are projected to rise less than 10% this year, according to the analysts at IDC.
“2014 will be an enormous transition year for the smartphone market,” said Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker. “Not only will growth decline more than ever before, but the driving forces behind smartphone adoption are changing. New markets for growth bring different rules to play by and ‘premium’ will not be a major factor in the regions driving overall market growth.”
Price trumps premium in the emerging markets that are currently driving smartphone adoption. “In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down,” said Ramon Llamas, Research Manager with IDC’s Mobile Phone team. “Last year we saw a total of 322.5 million smartphone units ship for under $150 and that number will continue to grow going forward. We’ve already seen numerous smartphone announcements targeting this priceband this year, with some as low as $25.”
Chinese manufacturers are bringing new smartphones to market for extremely low off-contract prices by sourcing components from up-and-coming Asian suppliers. “The level of competency in the product is extremely high,” said Andrew Rassweiler, senior director for cost benchmarking services at IHS Technology. “You can argue perhaps about the quality of the device, but then when you put it on the desk alongside higher-end phones, it’s pretty hard to argue. The results are tangible.”
Globally, IDC forecasts that smartphone shipments will rise almost 20% this year to 1.2 billion units. In 2013, one billion units were shipped, a 39% increase from 2012.
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