The smartphone market continues to see rapid growth worldwide, reaching 919 million units in 2013, representing a growth rate of 29% from 2012 and total mobile handsets grew 6.9% to reach 1.7 billion units. Also in 2013 for the first time, shipment volume of Smartphone handsets will overtake the number of standard handsets shipped and this trend will continue through to 2017.
Oliver Rowntree, a Futuresource Research Analyst says, “In 2012 the total worldwide trade revenues exceeded $180 billion and mobile handsets represented 38% of worldwide spending on consumer electronics”.
“Smartphone ownership reached 18% of the worldwide population in 2012 and in some developed markets it is already up to 80%, with all developed markets over 45%. However, penetration is still much lower in developing markets such as Asia, Africa, Eastern Europe and Latin America; though it is forecast to be 37% across these regions by 2017 as mobile ownership continues to transcend traditional CE social-demographic boundaries”.
“Samsung now dominates the total handset market and smartphone market while Apple continues to maintain a strong position in the smartphone market. Most other vendors saw a decline in market share, if not overall volumes – in particular both RIM and Nokia saw a further fall in their sales volumes”.
Different Markets
Moving forwards smartphone sales will continue to grow at the expense of feature phones, fuelled by falling prices and mobile content including music, games, video and infotainment, though Futuresource predicts that feature phones will still make up over 30% of mobile handset sales in 2017.
The USA market continues to have strong growth, aided by operator subsides and campaigns to promote superfast 4G mobile broadband, giving it among the largest 4G footprints in the world.
Steady growth has helped the USA remain the second largest smartphone market in the world (after China), with 119 million units sold in 2012. Certain markets such as the UK and Nordic countries have amongst the highest rates of personal smartphone penetration in the world – as high as 80%.
In these markets further sales will be driven primarily by replacement, while in less saturated markets such as Spain and Germany there will be large numbers of new users driving demand.
The developing markets will increasingly drive smartphone sales growth, as particularly in Asia and Africa the penetration of smartphones is still around 15%, and much of the population does not own even basic handsets. The smartphone market of Brazil, Russia and India are still relatively underdeveloped and will see consistently strong growth in the next few years.
In China, smartphones have quickly grown to become 58% of total handset sales, a share almost comparable to some developed markets. Android dominates emerging markets, and Futuresource research shows that it accounted for 82% of sales in China 2012. Samsung’s current flagship, the Galaxy S4, continues to be extremely popular, but overall the market continues to be driven by rapid uptake of low and mid-end smartphones, particularly in developing markets. Chinese handset companies such as Huawei, ZTE and Xiaomi have seen extremely strong growth, driven by their strength in the domestic Chinese market.
One of the main trends in 2012 was the expansion of screen sizes in high-end devices. Almost all major phone vendors have introduced larger ‘phablet’ smartphones in 2013, including Samsung, LG, HTC and Huawei. The Samsung Galaxy Note series has had significant success in 2012, and a number of competitors have also released similarly large-screened phablets, such as the 6.1 inch Huawei Ascend Mate. The form factor, defined as a smartphone with a screen of “5-7”, has proven extremely popular, particularly in South East Asia.
One notable exception is Apple, who new releases both retained a smaller 4 inch display, while the 5s introduced a new fingerprint ID scanner. The new handset received an extremely strong initial reception, though initial sales of the 5s were considerably stronger that those of the more basic 5c.