Emerging markets to push smartphone sales up 23.8% to 1.25 billion

Written by PTI | New Delhi | Updated: Aug 31 2014, 18:17pm hrs
SmartphonesEmerging countries in regions like India and China will help smartphone sales jump close to 24 per cent this year to 1.25 billion. (Thinkstock)
Emerging countries in regions like India and China will help smartphone sales jump close to 24 per cent this year to 1.25 billion, even as the growth pace slows down in mature markets, research firm IDC said.

According to IDC, more than 1.25 billion smartphones are expected to be shipped worldwide in 2014, representing a 23.8 per cent increase from the 1.01 billion units shipped in 2013.

Going ahead, total sales volumes are forecast to reach 1.8 billion units in 2018, resulting in a 12.7 per cent compound annual growth rate (CAGR) between 2013 and 2018.

Emerging markets, which includes Asia Pacific (excluding Japan), Latin America, Central and Eastern Europe, Middle East, and Africa, accounted for more than 50 per cent of the annual smartphone shipments dating back to 2011 and the trend is expected to continue.

In 2014, emerging markets are expected to see sales grow 32.4 per cent to 920.8 million units this year.

On the other hand, mature markets, which have consistently delivered double-digit year-on-year growth till last year, is now forecast to slow to just 4.9 per cent growth to 331.5 million units in 2014.

The emerging markets are expected to grow at a CAGR of 16 per cent compared to 3.6 per cent for mature markets till 2018.

"The smartphone market, which has experienced runaway growth over the last several years, is starting to slow. Mature markets have slowed considerably but still deliver strong revenues with average selling prices (ASPs) over USD 400," IDC Mobile Phone team Research Manager Ramon Llamas said.

Meanwhile, many emerging markets are still barrelling along, but with ASPs of less than USD 250, he added.

"The key for vendors now is to maintain a presence in the higher-margin mature markets, while establishing a sustainable presence within the fast-growing emerging markets. To enable this strategy, operating system companies are partnering with OEMs to provide low-cost handsets," Llamas said.

According to ICD, the catalyst for growth continues to be Android devices, which are expected to account for 88.4 per cent of the volume.

The support that Google's Android platform has received from over 150 handset manufacturers has allowed it to gain the share it has in emerging markets, IDC Worldwide Quarterly Mobile Phone Tracker Program Director Ryan Reith said.

"The lack of constraints around hardware and software specifications has helped bring to market many low-cost products, a lot of which could be considered borderline junk. With Google's recent announcement of Android One, they hope to change this by laying out a set of standards for manufacturers to follow," he added.