China To Surpass U.S. As Top Smartphone Market

by Mark Walsh, Mar 15, 2012, 4:42 PM

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Research firm IDC projects China will overtake the U.S. this year as the leading market for smartphone shipments, with low-cost Android devices driving uptake there. Looking further ahead, India and Brazil will join the top five country markets for smartphone shipments by 2016.

“Due to their sheer size, strong demand and healthy replacement rates, emerging markets are quickly becoming the engines of the worldwide smartphone market," stated Ramon Llamas, a senior research analyst at IDC.

While mature markets like Japan, the U.K. and the U.S. will see continued growth in smartphone adoption, the volumes will not keep up with those in emerging regions. In China, Android phones priced under $200 were especially hot sellers last year; that trend is likely to continue as devices become even more affordable. Domestic manufacturers like ZTE, Huawei and Lenovo are also expected to ramp up production.

China is expected to capture 20.7% of the smartphone market in 2012 among countries, just ahead of the U.S.’s 20.6% share. By 2016, China will claim 20.2% of the market and the U.S., 15.3%. India is projected to make the biggest leap, going from a 2.2% share in 2011 to 9.3% in five years, when it will rank third behind China and the U.S. in receiving smartphone shipments.

IDC predicts carriers in India will aggressively roll out 3G networks and data plans, while domestic operators, such as Micromax, Spice, Karbonn and Lava have begun introducing low-cost smartphones. Top-tier brands Samsung and HTC accounted for most growth last year.

"Demand for smartphones will also grow as urban and enterprise users mature in their handset preferences and usage," says G. Rajeev, senior market analyst for mobile devices with IDC India. "Consumers are growing accustomed to higher data usage and using handsets for entertainment and other content, instead of just as a communication device."

Propelled by a booming economy and low inflation, Brazil is also poised to see growing demand for smartphones. By 2016, the country is expected to surpass the U.K. as the fourth-largest smartphone market with a 4.7% share, up from a projected 2.3% this year.

IDC said the shift from feature phones to smartphones there is already underway, with prices for the latter falling below $300. Local carriers have also expanded prepaid data plans to include smartphones, putting high-end devices within reach of many more consumers. About 80% of Brazilian mobile customers use prepaid lines.

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