Emerging markets will drive growth in worldwide smartphone sales in the years ahead, International Data Corporation (IDC) said in a recent survey entitled the Worldwide Quarterly Mobile Phone Tracker. According to the consulting and research firm, China will become the leading country-level market for smartphone shipments in 2012, moving ahead of the current leader, the United States. Looking ahead to 2016, two additional emerging markets, India and Brazil, will enter the top 5 country markets for smartphone shipments.
The markets’ sheer size, strong demand and healthy replacement rates are among the reasons emerging markets are quickly becoming engines of the worldwide smartphone market, pointed out Ramon Llamas, a senior research analyst with IDC’s mobile phone technology and trends team.
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Llamas said that “users in emerging markets seek more than simple voice telephony, and smartphones offer the ideal platform for mobile entertainment, social networking and business usage as seen in developed markets.”
However, smartphone growth within emerging markets also has challenges, such as the total cost of device ownership. Many industry players have stressed the need for low-cost devices, as low as sub-US$50, to spur widespread adoption.
Another notable barrier to adoption that IDC notes is the cost of a monthly data plan.
IDC has also unveiled more detailed highlights related to China, India and Brazil. The company said that China, after surpassing the U.S. in smartphone shipments for two consecutive quarters in the second half of 2011, will carry that momentum into 2012 and beyond.
In China, Android smartphones priced below US$ 200 were a hot segment in 2011, and these low-cost smartphones are expected to remain a key driver for smartphone growth with prices becoming even more affordable on falling chipset prices and increased competition.
IDC did not forget domestic vendors and noted they will be another important engine of smartphone growth as giants Huawei, ZTE and Lenovo continue to ramp up with big carrier orders due to their willingness to produce customized handsets.
In regard to the Indian smartphone market, IDC predicted that the country will witness galloping growth throughout the forecast period. Carriers are expected to roll out 3G networks and data plans aggressively. Domestic vendors such as Micromax, Spice, Karbonn and Lava have already launched low-cost smartphones in a bid to drive future demand as they attempt to move up the value chain from low-cost feature phones.
In 2011, growth has been largely driven by top-tier brands such as Samsung and HTC, and international vendors will look to invest further in local manufacturing in the coming years as the high-growth Indian market becomes a top priority.
Last year, Brazil sold approximately 9 million smartphones, which represents an 84% increase over the 4.8 million sold in 2010. The IDC forecasts that in 2012, 15.4 million smartphones will be sold, a growth of 73%. Regarding operating systems, IDC noted that Android jumped from 15% of market share in 2010 to more than 50% last year, which is similar to the company’s global market share.
IDC also noted that Brazil’s booming economy combined with low inflationary pressures have helped lower the poverty rate in the country and improved the discretionary income of the Brazilian population. The resultant growth in Brazil’s consumer and business segments has been felt in products beyond mobile phones, with Brazil moving past Japan in 2011 to become the third largest country-level market for PCs.
