smartphone researchWorldwide smartphone shipments will double by 2017 to reach 1.5 billion units, with the launch of new flagship models by top brand name manufacturers during 2013’s first half contributing to the rise, according to a new IHS report.

Global smartphone shipments are expected to come in at 897 million units for 2013, up from 2012’s 712 million, according to IHS’ Mobile & Wireless Communications Report. Growth over the ensuing three years will come in at a constant annual growth rate (CAGR) of 15.8%, reaching 1.1 billion units in 2014, 1.2 billion in 2015 and 1.4 billion in 2016, IHS said.

“The volume of new flagship smartphone releases from top original equipment manufacturers (OEM) this year has been astounding,” IHS senior analyst for consumer and communications Wayne Lam was quoted in a press release. “These include the new BlackBerry Z10, the aluminum uni-body HTC One, and an update to the Samsung Galaxy S4 featuring a Full HD 5-inch active matrix organic light emitting diode (AMOLED) display.”

In contrast, Apple’s iPhone franchise has been stalling of late, with 1Q shipments of 37.4 million units falling below expectations, IHS notes. Unit shipments of iPhones may well wind up at around 150 million units for 2013, IHS analysts say. That compares to 134 million for 2012.

“The possible slowing growth of the iPhone and the rapid pace of competitive smartphones releases speak to the ferocious nature of the handset business, especially now as the market continues to pivot from a market dominated by lower-end handsets known as feature phones to one that is increasingly smartphone-centric,” Lam commented.

Smartphone penetration continues to increase, with smartphone shipments outpacing those of feature phones in the overall branded cellphone market again in 1Q 2013, according to IHS. Overall mobile handset shipments surpassed 400 million units for the first time ever in 4Q 2012 but then fell by nearly 50 million units in 1Q.

Lower cost and product differentiation are focal points for OEMs at this stage in the market’s development. Larger displays and a user experience more conducive to video, such as 5-inch or larger full HD displays, are becoming a necessity, for instance, IHS analysts stated. New features and formats add to OEMs’ cost base but also open up the possibility of winning new design slots for supply chain component suppliers, they added.