Smartphone Market To Grow 24% In 2014

The outlook for the smartphone market is a bit better than it appeared earlier this year. That’s according to the latest forecast from research firm IDC, which estimates worldwide smartphone shipments will increase 23.8% in 2014 to about 1.25 billion.

The research firm in February had projected shipments would grow 19.3%, and in May raised that figure to 23.1%.

The strong growth in emerging markets is helping to offset the slowdown in mature ones like the U.S. and Europe, where smartphone shipments will only grow 4.9% this year after recent years of double-digit gains. By contrast, emerging markets -- spanning countries like China and India -- will see a 32.4% surge in shipments as consumers snap up low-cost devices.



Still, even that rate is below the 38.4% growth for the entire smartphone market in 2013.

"The smartphone market, which has experienced runaway growth over the last several years, is starting to slow. Mature markets have slowed considerably but still deliver strong revenues with average selling prices (ASPs) over $400,” stated Ramon Lamas, research manager with IDCs mobile phone team, in the release. Smartphones in emerging markets, meanwhile, typically sell for less than $250.

More affordable phones mean higher sales. IDC expects smartphone volume in emerging markets to rise to 920.8 million, or 73.5% of that total. Android devices remain the catalyst, projected to account for nearly nine in 10 (88.4%) smartphones shipped in high-growth regions. The research firm estimates some 150 phone manufacturers support Google’s Android platform, driving its proliferation.

Android-based phone makers -- especially Samsung -- also helped lead the shift toward larger screens. In that vein, IDC projects so-called phablets (smartphones with 5.5” to 7” screens) will more than double to 32.2% of the market in 2018 from 14% this year.

Apple will help to drive that increase with its expected introduction of an iPhone model featuring a 5.5-inch screen next month (along with a 4.7-inch screen model). “Apple has the ability to drive replacement cycles in mature markets despite the slower growth,” according to IDC.

"Smartphone user in China" photo from Shutterstock.

1 comment about "Smartphone Market To Grow 24% In 2014".
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  1. Trung Ho from ASU, September 1, 2014 at 3:25 a.m.

    China’s Xiaomi and India’s Micromax are taking advantage of the falling cost of components and the open source Android operating system to offer inexpensive products to people looking to buy their first smartphones. The Chinese smartphone manufacturer like Xiaomi has grown quickly with the help of its distinctive business model. It sells its phones at a similar or lower price than Samsung does. It keeps prices low by selling phones at slim margins and making money instead on apps, entertainment content, and merchandise. Xiaomi is also expanding into India, the world’s third largest smartphone market after the U.S. and China. Meanwhile, Indian smartphone manufacturer, Micromax replaced Samsung as the mobile phone market leader in India and rose to second place behind Samsung in smartphone sales. As more vendors continue to launch low priced smartphone models, the price gap between feature phones and smartphones will be narrowed, driving rampant user migration in the price sensitive Indian market. Growth of smartphones in the India market does not rely on high-end devices like the iPhone, but on low-cost Android phones. While Samsung has held on to its leadership position in the market, it is noteworthy that Micromax is growing faster. Samsung needs to continue to address the low-end of the market more aggressively. Google's Android platform is becoming one of the most popular operating systems for smartphone in the world, which has received from so many manufacturers has allowed it to gain the share it has in emerging markets.

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