On Monday, market research firm IDC’s new report forecast that smartphones will finally surpass feature phones in global shipping sales in 2013 on smartphone price declines and 4G network launches.
While analysts have been saying this day will come for awhile, IDC has estimated for this year, 918.6 million smartphones will be shipped by manufacturers; this comprises 50.1 percent for the industry’s total shipments. By 2017, look for this to grow to 1.5 billion shipments.
According to IDC, this will correspond to approximately two-thirds of the total cell phone shipments. It cites three reasons for this change and growing interest in these all-encompassing phones: declining global smartphone prices, an increasing smartphone influence (where else can you surf the web, read your email and listen to music at your fingertips?) and the launch of data-centric fourth-generation (4G) wireless networks around the world
Increasing demand from such developing countries with big populations including China, Brazil, and India are also pushing this demand, representing a shift from the past, reported IDC. To date, the majority of the world’s smartphone shipments went to customers in mature markets like the U.S. But consumers in these aforementioned less-developed markets are now moving toward smartphones with its growing middle class. So much so that sales in these countries are expected to move past sales in markets, such as the U.S. soon.
Put China as the top of this list as more smartphones had been sold there in 2012. But it won’t continue forever.
According to Melissa Chau, Senior Research Manager, IDC Asia/Pacific, “While we don’t expect China’s smartphone growth to maintain the pace of a runaway train as it has over the last two years, there continue to be big drivers to keep the market growing as it leads the way to ever-lower smartphone prices and the country’s transition to 4G networks is only just beginning. Even as China starts to mature, there remains enormous untapped potential in other emerging markets like India, where we expect less than half of all phones shipped there to be smartphones by 2017, and yet it will weigh in as the world’s third largest market.”
It’s important to also keep an eye on Brazil. The key to its smartphone growth, according to IDC, is its successful Long-Term Evolution (LTE) rollout.
Bruno Freitas, Consumer Devices Research Manager, IDC Brazil added, “Brazilians have yet to turn in their feature phones for smartphones on a wholesale basis. The smartphone tide is turning in Brazil though, as wireless service providers and the government have laid the groundwork for a strong smartphone foundation that mobile phone manufacturers can build upon.”
Looking to 2013, the top five in the smartphone market is China (301.2 million shipments) in the top spot. The U.S. will follow in the second spot (137.5 million), along with the U.K. (35.5 million), Japan (35.2 million), and Brazil (28.9 million), respectively.
Fast forward to 2017 and here’s how the market will look: 1. China, 2. USA, 3. India, 4. Brazil, 5. United Kingdom, 6. Japan.
On a final note, the report does not go into specifics for market share projections for the different smartphones but according to Apple Insider, the competition from new operating systems such as Research In Motion Ltd (NASDAQ:BBRY) (TSE:BB)’s BlackBerry 10 and Microsoft Corporation (NASDAQ:MSFT)’s Windows Phone 8–to name a few– will drive growth in the U.S. smartphone market.
As for Apple Inc. (NASDAQ:AAPL), its iPhone 5 and iPhone 4s represented 21 percent of all smartphones sold worldwide in the fourth quarter.
