Smartphone shipments are on track to rise nearly 40% and exceed 1 billion units worldwide in 2013 while average selling prices (ASPs) drop more than 12%, according to the latest forecast from the IDC Worldwide Quarterly Mobile Phone Tracker service.
Smartphone ownership is nearing saturation levels in several mature markets, but demand for low-cost smartphones and telecomputing devices in emerging markets continues to fuel rapid growth, IDC market researchers highlight. They forecast smartphone shipments will total nearly 1.7 billion units by 2017, a compound annual growth rate (CAGR) of 18.4% over the period.
IDC expects average smartphone ASPs of $337 this year, down 12.8% from $387 a year ago. Android’s “turnkey processing solutions” have enabled new manufacturers to enter the smartphone market and attempt to build brand awareness by introducing low-cost handsets, IDC points out.
“The game has changed quite drastically due to the decline in smartphone ASPs,” IDC Worldwide Quarterly Mobile Phone Tracker program director Ryan Reith was quoted in a press release. “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.”
“The key driver behind smartphone volumes in the years ahead is the expected decrease in prices,” added IDC mobile phone team research manager Ramon Llamas. “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.”
Smartphone shipments will continue to increase in mature as well as emerging markets over the forecast period, according to IDC’s market researchers, but it will be markets in Asia/Pacific, Latin America, the Middle and Africa that “post market-beating growth rates.”
Increasing affordability – i.e. cheaper selling prices – is the key to keeping volumes growing, with ASPs in emerging markets, led by Asia/Pacific, continuing to decline from 2013-2017. “This will enable more users to afford smartphones for the first time, and in many cases, allow users to bypass purchasing feature phones altogether and go straight to smartphones,” IDC concludes.
