Smartphone shipment up 40% while average price drops 12%

IDCWorldwide smartphone shipments are expected to surpass one billion units in 2013, representing 39.3 percent growth over 2012, according to a recently published mobile phone forecast from IDC Worldwide Quarterly Mobile Phone Tracker.

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 percent from 2013 to 2017.

While shipment has gone up, the average selling price (ASP) has seen a steady decline. 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 US$337, down 12.8 percent from US$387 in 2012. This trend will continue in the years to come and IDC expects smartphone ASPs to gradually drop to US$265 by 2017.

“The game has changed quite drastically due to the decline in smartphone ASPs,” said Ryan Reith, Program Director of IDC’s Worldwide Quarterly Mobile Phone Tracker. “Just a few years back the industry was talking about the next billion people to connect, and it was assumed the majority of these people would do so by way of the feature phone. Given the trajectory of ASPs, smartphones are now a very realistic option to connect those billion users.”

“The key driver behind smartphone volumes in the years ahead is the expected decrease in prices,” said Ramon Llamas, Research Manager of 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 realising a profit and offering a robust smartphone experience.”

From a volume perspective, emerging markets including Asia/Pacific, Latin America, and Middle East and Africa (MEA) will all post market-beating growth rates from 2013 to 2017. Asia/Pacific will also experience some market share growth from 2013 to 2017.

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 (units in millions) 

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%

Source:  IDC Worldwide Quarterly Mobile Phone Tracker, November 26, 2013

Note:  *Includes forecast data

Worldwide Smartphone Average Selling Price (ASP) by Region and 5-Year CAGR (figures in $USD) 

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%

Source:  IDC Worldwide Quarterly Mobile Phone Tracker, November 26, 2013

Note:  *Includes forecast data

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