A new mobile phone forecast from the International Data Corporation (IDC) Worldwide Quarterly Mobile Phone Tracker, worldwide smartphone shipments will slow to 8.3% annual growth in 2017 and 6.2% in 2018.
Annual smartphone volume in 2013 surpassed 1 billion units for the first time, accounting for 39.2% growth over 2012.
In the coming year, IDC expects mature markets like North America and Europe to drop to single digits, and Japan might contract slightly.
Despite the high growth expected in many emerging markets, 2014 will mark the year smartphone growth drops more significantly than ever before.
2014 volumes are expected to be 1.2 billion, up from 1 billion in 2013, representing 19.3% year-over-year growth.
“In North America we see more than 200 million smartphones in active use, not to mention the number of feature phones still being used,” said Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker.
“2014 will be an enormous transition year for the smartphone market. Not only will growth decline more than ever before, but the driving forces behind smartphone adoption are changing. New markets for growth bring different rules to play by and ‘premium’ will not be a major factor in the regions driving overall market growth.”
As mature markets become saturated and worldwide growth slows, service providers and device manufacturers are seeking opportunities to move hardware wherever they can.
The result is rapidly declining price points, creating challenging environments in which to turn a profit. Worldwide smartphone average selling price (ASP) was $335 in 2013, and is expected to drop to $260 by 2018.
“In order to reach the untapped demand within emerging markets, carriers and OEMs will need to work together to bring prices down,” said Ramon Llamas, Research Manager with IDC’s Mobile Phone team.
“Last year we saw a total of 322.5 million smartphone units ship for under $150 and that number will continue to grow going forward. We’ve already seen numerous smartphone announcements targeting this price band this year, with some as low as $25. Just as the dynamics have changed for overall smartphone growth, so have the dynamics for smartphone pricing in the markets where continued growth is expected. Not all vendors will want to get into this space, but those that do must make deliberate choices about their strategies in order to succeed.”