Smartphone growth to 'drop significantly' in 2014

Smartphone growth to 'drop significantly' in 2014

Smartphone growth will 'drop more significantly than ever before' in 2014 as the market hits saturation point.

According to IDC's new mobile phone forecast, 2014 volumes are expected to be 1.2 billion, growing 19.3% from 1 billion in 2013. The previous year, from 2012, the worldwide smartphone market grew by 39.2%. Despite expected high growth in emerging markets, especially following the unveiling of several low-cost devices at MWC like the Nokia X, growth in mature markets like Europe and North America is expected to decline to single digits.

As a result, smartphone price points are declining significantly, with the worldwide average selling price of $335 (£201) dropping to $260 (£156) by 2018. IDC also forecasts a worldwide decline in growth as shipments will slow down to 6.2% in 2018.

In terms of OS market share, Android and iOS are expected to lead the way again, with the Google-developed operating system dominating the market with 76% share. This share is expected to grow to 78.9% by 2018. Windows Phone is earmarked to increase market share over the next four years from 3.9% to 7% of the market, although this may correlate with a large 8.3% decrease in price for Windows-based devices over the four-year period. At present, smartphones powered by Windows Phone cost an average of $265 (£159), although that is predicted to go down to $195 (£117) by 2018. iPhones are expected to decrease in price marginally (1.2%), but will stay around the $610 (£366) mark.

Elsewhere, the struggling BlackBerry is predicted to see its market share decrease by 22.6% between now and 2018, with just 0.3% of the market.

IDC mobile phone research manager, Ramon Llamas, said: ‘In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down. 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. 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. 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.’

IDC worldwide quarterly mobile phone tracker program director, Ryan Reith, added: ‘In North America we see more than 200 million smartphones in active use, not to mention the number of feature phones still being used. 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.’

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