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Worldwide smartphone shipments will slow to 8.3 per cent annual growth in 2017 and 6.2 per cent in 2018, according to the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, down from 39.2 per cent growth last year, when smartphone volume surpassed one billion units for the first time.
IDC said it expects mature markets like North America and Europe to drop to single digit growth this year, while Japan might also contract slightly.
“Despite the high growth expected in many emerging markets, 2014 will mark the year smartphone growth drops more significantly than ever before. 2014 volumes are expected to be 1.2 billion, up from one billion in 2013, representing 19.3% year-over-year growth,” IDC said.
“In North America we see more than 200 million smartphones in active use, not to mention the number of feature phones still being used,” said Ryan Reith, programme director with the Worldwide Quarterly Mobile Phone Tracker.
“2014 will be an enormous transition year for the smartphone market. Not only will growth decline more than ever before, but the driving forces behind smartphone adoption are changing. New markets for growth bring different rules to play by and ‘premium’ will not be a major factor in the regions driving overall market growth.”
The report said as mature markets become saturated and worldwide growth slows, service providers and device manufacturers are seeking opportunities to move hardware wherever they can.
“The result is rapidly declining price points, creating challenging environments in which to turn a profit. Worldwide smartphone average selling price (ASP) was US$335 in 2013, and is expected to drop to US$260 by 2018,” IDC said.
“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 with IDC’s Mobile Phone team.
“Last year we saw a total of 322.5 million smartphone units ship for under US$150 and that number will continue to grow going forward. We’ve already seen numerous smartphone announcements targeting this priceband this year, with some as low as US$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.”
IDC also said Android will maintain its position as the leading operating system (OS), due to its strong presence within emerging markets and attainable price points for both vendors and customers, with iOS remaining in second place.
“Windows Phone stands to grow the fastest among the leading smartphone operating systems, with continued support from Nokia as well as the addition of nine new Windows Phone partners. Most of these new vendors come from emerging markets and could help bring the Windows Phone experience to customers there,” IDC said, though it took a “conservative stance” on BlackBerry.