Smartphone Shipments to Hit 1.8 Billion in 2018

Growth will come from emerging markets and an unending appetite for low-cost Android devices, says IDC.

Mobile device vendors will ship 1.8 billion smartphones worldwide in 2018, according to a new forecast from IT research firm IDC.

This year, the analyst group expects smartphone shipments of 1.25 billion, compared to 1.01 billion units last year. All told, the market will expand at a compound annual growth rate (CAGR) of 12.7 percent from 2013 through 2018, predicted IDC.

Leading the charge are emerging markets, which IDC classifies as the Asia/Pacific (excluding Japan) region, Latin America, Central and Eastern Europe, Middle East and Africa.

Noting that 50 percent of smartphone shipments since 2011 can be attributed to emerging markets, it was until 2014 that "mature markets have consistently delivered double-digit year-on-year growth," said the company. Now, there are signs that smartphone demand in mature markets (the U.S., Western Europe, Japan and Canada) is plateauing.

"In 2014, IDC expects mature markets will slow to just 4.9 percent growth, with emerging markets continuing to soar at 32.4 percent, pushing the total market up 23.8 percent," stated the research firm.

"Mature markets have slowed considerably but still deliver strong revenues with average selling prices (ASPs) over US$400," observed IDC research manager Ramon Llamas in a statement. "Meanwhile, many emerging markets are still barreling along, but with ASPs of less than US$250."

Android is synonymous with low-end devices, which is both a blessing and a curse according to DC's Worldwide Quarterly Mobile Phone Tracker program director, Ryan Reith. "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," he said in a statement.

That perception may soon change as Google makes moves to rein in vendors of budget devices, added Reith.

"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 said. Eighty-eight percent of smartphones shipped this year will run Android, estimates IDC.

By 2018, emerging markets will account for 79.5 percent of all smartphone shipments, up from 73.5 percent this year, while mature markets will make up the rest (20.5 percent).

Phablets, or smartphones with screen sizes ranging from 5.5 inches to 7 inches, are also on the rise. Expected to comprise 14 percent of the market this year, by 2018 that figure will grow to 32.2 percent.

And that spells good news for Google's main smartphone rival. "With the expected entry of Apple into this market segment, and the pent-up demand for a larger screen iPhone, Apple has the ability to drive replacement cycles in mature markets despite the slower growth seen in recent quarters," said IDC.

Pedro Hernandez is a contributing editor at Datamation. Follow him on Twitter @ecoINSITE.




Tags: Android, Apple, smartphone


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