Circuits Assembly Online Magazine - Smartphone Growth Continues Unabated

FRAMINGHAM, MA – Worldwide smartphone shipments are expected to surpass 1 billion units in 2013, representing 39.3% growth over 2012, IDC said. 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, the research firm stated.

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.

A number of trends co-exist in the global smartphone market, but none has more of an effect on driving market growth than the steady decline in average selling prices, the firm said. Android has enabled a number of new manufacturers to enter the smartphone market supported by a variety of turnkey processing solutions. Many of these handset vendors have focused on low-cost devices as a way to build brand awareness. In 2013, IDC expects smartphone ASPs to be $337, down 12.8% from $387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to $265 by 2017.

From a volume perspective, emerging markets including Asia/Pacific, Latin America, and Middle East and Africa will all post market-beating growth rates from 2013 to 2017. Asia/Pacific will also experience some market share growth from 2013 to 2017. Developed markets, by contrast, will see market share erosion, but will nonetheless see volume increases during the same time period. All combined, the worldwide smartphone market is poised for certain growth.

Similarly, from a price perspective, ASPs in these same emerging markets will post single-digit CAGR declines from 2013 to 2017, led by Asia/Pacific. This will enable more users to afford smartphones for the first time, and in many cases, allow users to bypass purchasing feature phones altogether and go straight to smartphones.

Worldwide Smartphone Forecast by Region, Shipments, Market Share and 5-Year CAGR

Region	2013 Shipment Volumes*	2013 Market Share	2017 Shipment Volumes*	2017 Market Share	5 Year CAGR
Asia/Pacific	528.2	52.3%	986.0	58.5%	23.2%
Europe	182.1	18.0%	261.0	15.5%	11.1%
North America	151.0	15.0%	189.0	11.2%	7.8%
Latin America	91.1	9.0%	154.7	9.2%	23.7%
Middle East and Africa	57.6	5.7%	95.0	5.6%	18.5%
Total	1,010.1	100.0%	1,685.8	100.0%	18.4%

In millions of units. Source: IDC Worldwide Quarterly Mobile Phone Tracker, Nov. 26, 2013

Note: *Includes forecast data

Worldwide Smartphone ASP by Region and 5-Year CAGR

Region	2013 Smartphone ASP*	2017 Smartphone ASP*	5 Year CAGR
Asia/Pacific	$262	$215	-8.9%
Europe	$419	$259	-9.0%
North America	$531	$567	2.1%
Latin America	$288	$246	-5.7%
Middle East and Africa	$338	$230	-7.3%
Total	$337	$265	-7.3%