Worldwide shipments of smartphones topped one billion units for the first time, according to a report from International Data Corp. (IDC). To be exact, vendors shipped 1,004.2 million smartphones worldwide in 2013, up 38.4 percent from 725.3 million units in 2012. The top five vendors are Samsung, Apple, Huawei, Lenovo, and LG.
In the worldwide total mobile phone market, vendors shipped 1,821.8 million units in 2013, up 4.8 percent from 1,738.1 million units shipped in 2012, according to IDC's Worldwide Quarterly Mobile Phone Tracker. Smartphones accounted for 55.1 percent of all mobile phone shipments in 2013, up from 41.7 percent in 2012.
In the fourth quarter of 2013, vendors shipped a total of 488.4 million units worldwide, up 0.9% from the 484.0 million units shipped in 4Q12. In comparison, vendors shipped a total of 284.4 million smartphones globally in Q413, up 24.2 percent from 229.0 million units shipped in 4Q12.
"The sheer volume and strong growth attest to the smartphone's continued popularity in 2013," said Ramon Llamas, research manager with IDC's Mobile Phone team, in a statement. "Total smartphone shipments reached 494.4 million units worldwide in 2011, and doubling that volume in just two years demonstrates strong end-user demand and vendor strategies to highlight smartphones."
These numbers also indicate big growth for chipmakers that serve the wireless market. Smartphones and mobile PCs were recently pegged by IHS Technology as the top revenue opportunities for high-speed wireless IC suppliers by 2018, based on high-volume projections in this market over the next five years.
More than 80 million high-speed wireless ICs are forecast to ship into the smartphone market between 2013 and 2018, exceeding $260 million in 2018, according to the IHS report "60GHz Technologies and Other Competing Wireless Standards – World – 2013.”
Large screen devices and low cost are expected to continue as the top growth drivers for smartphones. "Among the top trends driving smartphone growth are large screen devices and low cost," said Ryan Reith, program director with IDC's Worldwide Quarterly Mobile Phone Tracker, in a statement.
"Of the two, I have to say that low cost is the key difference maker. Cheap devices are not the attractive segment that normally grabs headlines, but IDC data shows this is the portion of the market that is driving volume," Reith stated. "Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many."
While it's true that 3G smartphones still account for the majority of phones shipped in China, with 2G models still available, the 4G smartphone market is poised for significant growth this year, according to the latest report from IHS. The market research firm expects China's domestic market for these devices to grow sixteenfold from 2013 levels to reach 72.4 million units in 2014, up from 4.6 million last year.
High growth rates will continue over the next few years: 4G smartphone shipments are expected to double next year to 144.1 million units; increase another 53 percent to 219.8 million in 2016, and reach 298.5 million units in 2017, according to the IHS report “China Smartphone Market Enters 4G Era."
3G smartphone shipments, which will continue to dominate the market over the next few years, will reach 290.3 million units in 2014, up 1 percent from 287.2 million last year, according to IHS.
The Chinese smartphone market is controlled by domestic original equipment manufacturers (OEM) with 70 percent market share. The top producers include Huawei Technologies with more than 50 million units, followed by Lenovo with 44 million and ZTE with 40 million, said IHS. Up and comers for 2014 include Xiaomi, OPPO and vivo.
While high-end smartphones in China can cost more than 3,000 renminbi, or nearly $500, the cost "is heavily subsidized by the carriers to help persuade consumers to buy new handsets," said IHS. The market research firm also reported that three operators in 2013 spent 27 billion renminbi (almost $4.5 billion) in subsidies for 3G smartphones, up 10 percent from 2012.
The good news: The gray market for handsets is on a downward slope. IHS predicts gray market handsets will fall to 183 million units in 2014 from 200.3 million units in 2013.