February 26, 2014
Saturated Market Points To Slowing Smartphone Shipments In 2014
[ Watch the Video: Smartphone Shipments To Decline ]
Lee Rannals for redOrbit.com - Your Universe OnlineInternational Data Corp (IDC) is reporting that smartphone shipments around the world will be slowing significantly in 2014.
The market intelligence agency said in its Worldwide Quarterly Mobile Phone Tracker report that despite a strong 2013, smartphone growth is beginning a downhill trend. The report said that smartphone shipments will be slowing down to 8.3 percent in annual growth in 2017 and 6.2 percent in 2018.
IDC is also predicting that markets like North America and Europe will drop to single digit numbers. The report says that 2014 will mark the year smartphone growth drops more significantly than ever before.
"In North America we see more than 200 million smartphones in active use, not to mention the number of feature phones still being used," Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker, said in a statement. "2014 will be an enormous transition year for the smartphone market. 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."
Smartphones have saturated mature markets, which in turn means worldwide growth will begin to slow down. As this is happening, service providers and device manufacturers are trying to find new ways to move hardware where they can. One way companies will be able to combat this is by dropping price points. According to IDC, the average smartphone around the world will cost $260 by 2018, compared to $335 in 2013.
"In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down," Ramon Llamas, Research Manager with IDC's Mobile Phone team, said in a statement. "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.”
IDC is predicting that Android will retain its role as the leading operating system throughout the forecast, while Apple will hold strong at number two. The report also says that Windows Phone stands to grow the fastest among the leading smartphone operating systems, due to continued support from Nokia and nine new partners.
The forecast only shows Apple’s smartphone dropped slightly over the next four years, while Android and Windows Phones see a more significant drop in average selling price.
“Just as the dynamics have changed for overall smartphone growth, so have the dynamics for smartphone pricing in the markets where continued growth is expected,” Llamas said. “Not all vendors will want to get into this space, but those that do must make deliberate choices about their strategies in order to succeed."