The International Data Corporation (IDC)’s latest Worldwide Quarterly Mobile Phone Tracker data shows that smartphone shipments are due to clear 1 billion by year end, the highest level ever, and “representing 39.3% growth over 2012,” according to IDC. “Despite a number of mature markets nearing smartphone saturation, the demand for low-cost computing in emerging markets continues to drive the smartphone market forward. By 2017, total smartphone shipments are expected to approach 1.7 billion units, resulting in a compound annual growth rate (CAGR) of 18.4% from 2013 to 2017.”
Falling prices for Android handsets, as well as the computer functionality already mentioned, are cited by IDC as the main adoption drivers. “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. “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 emerging markets in question in particular are Asia Pacific, Latin America, and Middle East and Africa (MEA), all expected to “post market-beating growth rates.” And presumably, in Asia in particular, a virtuous cycle will set in, where low-cost manufacturing will drive further price erosion. Many users, indeed, will “bypass purchasing feature phones altogether and go straight to smartphones.”
As already instanced in TeleRead for the previous set of IDC quarterly numbers, these trends bode no good for Apple. “Android has enabled a number of new manufacturers to enter the smartphone market,” notes IDC. The latest growth levels only make matters worse. And it’s hard to see the Cupertino Core managing to turn the situation round even with its latest range of lower-cost iPhones. The market simply seems to be in all too much danger of moving on past it.