Worldwide Mobile Phone Market To Grow 7.3 Percent in 2013 Due to Strong Smartphone Demand

idc-logo1The worldwide mobile phone market is projected to grow 7.3 percent year-over-year in 2013, up from the nearly flat 1.2 percent growth experienced in 2012 and higher than the 5.8 percent originally forecast for 2013, due to the strong demand for smartphones across all geographies, which is forecast to cause smartphone shipments to surpass one billion units for the first time in a single year, according to a recent International Data Corporation (IDC) report. The Worldwide Quarterly Mobile Phone Tracker also expects the overall mobile phone market to grow faster than previously forecast due to strong gains in emerging markets and the sub-$200 smartphone segment causing a better than expected first half of the year.

“Two years ago, the worldwide smartphone market flirted with shipping half a billion units for the first time, to double that in just two years highlights the ubiquity that smartphones have achieved,” said Ramon Llamas, IDC research manager for mobile phones. “The smartphone has gone from being a cutting-edge communications tool to becoming an essential component in the everyday lives of billions of consumers. Underpinning the smartphone market is an evolving market for operating systems. We believe Android and iOS will remain the clear number one and two platforms, respectively, throughout our forecast. What remains to be seen is how Windows Phone and BlackBerry’s respective futures will play out pending their recent announcements. Windows Phone has inched ahead of BlackBerry during the first half of 2013, and we believe that will extend into the future. However, overall shipments will continue to trail those of Android and iOS.”

Additional highlights from the report include:

  • Vendors are now forecast to ship more than 1.8 billion mobile phones this year, growing to over 2.3 billion mobile phones by 2017.
  • Worldwide smartphone shipments are forecast to grow 40.0 percent year-over-year to more than one billion units this year.
  • High smartphone growth is the result of a variety of factors, including steep device subsidies from carriers, especially in mature economic markets, as well as a growing array of sub-$200 smartphones.
  • Total smartphone shipments are forecast to reach 1.7 billion units by 2017.
  • Android is projected to end the year at 75.3 percent market share and remain the dominant smartphone operating system through 2017 even though its market share will decline somewhat, to 68.3 percent, as the market matures and competition solidifies. The volume of devices at wide ranging price points combined with Google’s backing and a growing application library is projected to keep Android the top smartphone OS with Samsung the top seller of Android-based smartphones, though the resurgence of LG and Sony have also contributed to Android’s success in recent quarters.
  • iOS is projected to remain the number two OS, ending the year at 16.9 percent market share and increasing to 17.9 percent by 2017, as the expected launch of a lower-cost iPhone will open up a wider addressable market. Apple’s growth rate is projected to increase due to enterprise and emerging market share gains, driven in part by a likely deal with China Mobile, which will give it greater reach into a fast-growing smartphone market. However, the share gains will be tempered by relatively high price points for iPhone, making for a lower share ceiling.
  • Windows Phone is projected to solidify its position as the number three OS, ending 2013 with 3.9 percent market share and increasing, although incremental, share gains over the course of the forecast to reach 10.2 percent by 2017. Microsoft’s acquisition of Nokia’s device and services unit will create the need to drive share gains by itself while OEM support for Windows Phone wanes as the company becomes a full-fledged hardware maker. Microsoft will also need to ship more low-cost smartphones to high-growth emerging markets if it is to continue building on its recent nominal share increases.
  • BlackBerry’s OS share is projected to decline markedly over the forecast, ending this year at 2.7 percent and dropping to 1.7 percent by 2017, due to tepid BlackBerry 10 reception and emboldened competition that are expected to whittle away share in its remaining regional bastions of strength, such as Africa, Latin America, and the Middle East. BlackBerry volume will remain flat as the market expands around it thanks to enterprises with security or other specialized needs that continue to purchase devices from the company.

“Smartphones will represent virtually all of the mobile phone market in many of the world’s most developed economies by the end of 2017,” said Kevin Restivo, Senior Research Analyst with IDC’s Worldwide Mobile Phone Tracker program. “Aggressive carrier subsidies of handsets, falling prices, higher consumer awareness, and a vast array of devices will mean almost all phones shipped to the developed world will be ‘smart.’ However, smartphone shipment volume will be dominated by emerging markets, such as China, even though the percentage of smartphones to feature phones won’t be as high.”

(For additional information, contact: International Data Corporation, www.idc.com.)