Smartphone Growth to Slow Significantly in Coming YearsBy: Sean Patterson - February 26, 2014
Since the debut of the first iPhone the smartphone market has been bursting with growth. The entire mobile device industry has grown at an astonishing rate, a trend which looks to continue in the coming years as wearable devices become the norm. The explosive growth of smartphones can’t last forever, though, and market watchers are already seeing signs of growth slowdown in the market.
Market research firm IDC today released a new report predicting that smartphone market growth will slow to just 6.2% by the year 2018. To compare, IDC’s estimate for year-over-year smartphone industry shipment growth in 2013 was 39.2% with over one billion smartphones shipped worldwide.
Established markets such as the U.S. will begin to see much slower growth rates even sooner, as smartphone shipment volumes shift to emerging markets such as China. IDC forecasts that the U.S. and Europe could see single-digit growth by as early as this year.
Meanwhile, the rush to establish brands in emerging markets will drive smartphone prices down, with IDC predicting an average sale price of only $260 by the year 2018. BlackBerry demonstrated the concept just this week with its announcement of the BlackBerry Z3, a mid-range, low-priced smartphone targeted specifically at Indonesia and other emerging markets.
“In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down,” said Ramon Llamas, research manager for mobile phones at IDC. “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 price band 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.”
Image via Samsung