smartphone researchSmartphone shipments will meet and exceed those of older feature phones a full two years sooner than previously anticipated, according to a new report from IHS iSuppli. Growing demand in developed markets and unexpectedly high demand from emerging markets will drive smartphone shipments to account for the majority of cell phone shipments worldwide in 2013, according to a company press release.

Smartphone shipments will make up 54% of total cell phone shipments globally in 2013— marking the first time they’ll surpass those of older feature phones. That’s up from 46% in 2012 and 35% in 2011, according to a forecast in IHS iSuppli Wireless Communications market tracker report.

Double-digit growth in smartphone shipments will continue for the next few years, IHS iSuppli says. Smartphones will account for 67.4% of global cell phone shipments in 2016, analysts forecast.

The market research firm’s latest forecast significantly upgrades last year’s, when IHS iSuppli forecast that smartphone shipments would overtake feature phone shipments in 2015. The upwardly revised forecast is due to smartphones’ increasing affordability and a greater variety of models, which are spurring sales of low-end smartphones in Asia-Pacific countries such as China, as well as mid to high-end smartphones in the U.S. and Europe, IHS iSuppli explains.

Rising smartphone shipments will coincide with declining feature phone shipments, which are a step above the most basic, entry-level cell phones. Still the most widely shipped type of cell phone, feature phones accounted for 45.9% of global shipments in 2011.

That market share is going to decrease to 40.5% in 2012, setting in motion what will be “an irreversible decline,” IHS iSuppli says. “Feature phone shipments will continue declining to account for only 28.4% of global shipments by 2016, less than half the market share of smartphone shipments, IHS iSuppli forecasts.

Low-cost, entry-level cell phones will continue to represent the bottom tier of the global cell phone market, accounting for some 19.4% of global shipments in 2012. IHS iSuppli forecasts that’s going to drop to just 4.2% by 2016.

Ongoing growth and evolution in the market for mobile applications will also support smartphones’ growing importance in the global cell phone market. IHS iSuppli divides the smartphone market into two segments: mid to high-end smartphones and low-end smartphones.

Manufacturers are introducing low-end smartphones with less memory and more limited feature sets in developing countries and emerging markets, spurring consumer uptake and getting consumers familiar and comfortable with data plans. Low-end, often first-time smartphone buyers in these markets will account for 43% of the global smartphone market by 2016, according to IHS iSuppli.

Consumer demand for mid to high-end smartphones, in contrast, will come from developed country markets and in the industrialized areas of some developing nations. Overall, smartphone consumers in these markets will continue to outnumber their low-end counterparts in other markets. IHS iSuppli analysts forecast there will be more than 700 million mid to high-end smartphone users worldwide by 2016.

Apple and Google will continue to be the dominant players’ smartphone platform providers, with Microsoft picked to provide a “third viable smartphone platform in the years to come.”

In contrast, Symbian from Nokia, WebOS from Palm and RIM’s BlackBerry are casualties of the intense competition in the smartphone space. Software capability, sleek and intuitive user interfaces, mobile app variety and availability, strong developer community support and strength in vertical integration, as opposed to hardware capabilities alone, will continue to grow in importance as factors underlying success in the smartphone platform market.

Looking at smartphone handset manufacturers, Samsung became the worldwide leader during 1Q 2012, though that may prove fleeting given a jury ruling in favor of Apple’s patent infringement suit against Samsung that comes with as much as $1.5 billion in penalties. Nokia dropped to second in 2Q, falling from the market-leading top position it had occupied for well over a decade, IHS iSuppli notes.

Apple, China’s ZTE and South Korea’s LG Electronics rounded out IHS iSuppli’s top 5 global smartphone handset manufacturer rankings for 1Q 2012.

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