Framingham, Mass. – Global smartphone shipments are forecast to exceed 1.0 billion units in 2013, translating into 39.3% growth over 2012, according to an International Data Corporation (IDC) report. A key finding reveals that demand for low-cost computing in emerging markets continues to drive growth despite a number of mature markets nearing saturation.
Total smartphone shipments are expected to reach approximately 1.7 billion units by 2017, resulting in a compound annual growth rate (CAGR) of 18.4% from 2013 to 2017, according to IDC's Worldwide Quarterly Mobile Phone Tracker.
"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," said Ramon Llamas, research manager with IDC's Mobile Phone team, in a statement. "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."
The report also indicates that average selling prices (ASPs) for smartphones will decline by 12.8% to $337 in 2013, compared to $387 in 2012. IDC expects this trend to continue with ASPs gradually falling to $265 by 2017. "A number of trends co-exist in the global smartphone market, but none have more of an affect on driving market growth than the steady decline in average selling prices (ASPs)," said IDC.
"The game has changed quite drastically due to the decline in smartphone ASPs," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker, in a statement. "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."
Based on volumes, IDC expects emerging markets including Asia/Pacific, Latin America, and Middle East and Africa (MEA) to reach market-beating growth rates from 2013 to 2017. In comparison, developed markets will lose market share, although still experiencing volume increases over the same forecast period, said IDC.
IDC also forecasts ASPs to fall in the single digits from 2013 to 2017 at a CAGR, led by Asia/Pacific. This is expected to drive up first-time purchases of smartphones, and in some cases, allow users to bypass feature phone purchases and go straight to smartphones, according to the report.