Smartphone prices are set to decline over the next four years as Android continues to facilitate the development of low-cost devices.
IDC expects average selling prices (ASP) of smartphones to be $337 (£208) in 2013, 12.8% lower than in 2012 (£239). It is a trend the technology research company expects to continue over the next few years, with ASPs projected to be $265 (£164) by 2014.
Research manager with IDC’s mobile phone team Ramon Llamas said: ‘The key driver behind smartphone volumes in the years ahead is the expected decrease in prices. Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass market users. Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience.’
Program director with IDC, Ryan Reith, added: ‘The game has changed quite drastically due to the decline in smartphone ASPs. Just a few years back the industry was talking about the next billion people to connect, and it was assumed the majority of these people would do so by way of the feature phone. Given the trajectory of ASPs, smartphones are now a very realistic option to connect those billion users.’
Elsewhere, worldwide smartphone shipments are expected to exceed the 1 billion mark in 2013, which would represent almost 40% growth from 2012. This figure is expected to reach 1.7 billion by 2017. Market share will continue to increase in emerging markets like Asia and Pacific, and Latin America. It is forecast that by 2017 the Asia and Pacific market will account for almost 1 billion smartphone shipments itself.
Market share in Europe will decrease by 2.5% by 2017, although smartphone shipments will almost double from 182.1 million to 261 million. It also is in Europe that the ASP of smartphones are predicted to decrease the most, from an average of $419 (£259) in 2013 to $259 (£160) by 2017.
Author: Matthew Campelli