Smartphone shipments outnumber feature phones worldwide as adoption skyrockets: IDC
By Chantal Tode
March 5, 2013
In a sign of the growing role that smartphones are playing on a global basis, research firm IDC forecasts that more smartphones will be shipped worldwide than feature phones for the first time in 2013.
According to IDC’s Worldwide Quarterly Mobile Phone Tracker, vendors will ship 918.6 million smartphones this year, or 50.1 percent of total mobile phone shipments worldwide. Lower prices for smartphones and the roll-out of 4G wireless networks are two of the factors making smartphones increasingly attractive to consumers.
“The fact that we have hit this turning point where smartphones are going to be outnumbering feature phones in terms of sales that strengthens what we’ve been saying for a while, that smartphones are where it’s at,” said Ramon Llamas, research manager for mobile phones at IDC, Framingham, MA.
“If you are in the feature phone market, it is time to switch over,” he said. “Or, if you a vendor, it is time to make your feature phone smarter, kind of like a smartphone-light experience.
“We’ve seen Nokia do this with its Osha product range and Samsung, just last week, released a bunch of feature phones called REX. They are saying they are going to make their feature phones better, smarter and use some third-party applications on them – you just can’t use a bunch of them at the same time.”
From a marketing perspective, the results suggest there are growing opportunities for brands to reach their audience via mobile.
For example, as feature phones evolve to include more smartphone-like features there may be new ways for marketers to reach these users.
Additionally, brands with an international reach will increasingly find that mobile offers a compelling way to reach audiences on a global basis.
“As feature phones become that much more smartphone-lightish there is an opportunity to reach users with in-app advertising to reach those users that much better,” Mr. Llamas said.
“If you want to get into those emerging markets, mobility is going to be one of the big ways to go,” he said.
By the end of 2017, IDC forecasts 1.5 billion smartphones will be shipped worldwide, accounting for more than two-thirds of total mobile phone shipments for the year.
While much of smartphone shipment volume has until now taken place in mature economies such as the United States, IDC says that the balance of smartphone demand is shifting to emerging markets where the current user base is still relatively small.
In particular, growth is expected to be strong in China, Brazil and India over the new few years as the economies in these large countries grows, laying the groundwork for a larger middle class able to purchase smartphones.
China replaced the U.S. last year as the global leader in smartphone shipments and the pace of growth is expected to continue to be robust although not quite as strong as it has been over the past two years. Low-cost handsets based on Android will continue to reign here.
In India, less than half of all phones shipped are expected to be smartphones by 2017, but given the country’s large population, it will still be the world’s third-largest market. The year-over-year smartphone shipment growth is expected to be highest here among the top countries since the vast majority of the country’s wireless subscriber base currently uses feature phones.
Brazil’s smartphone adoption rate is expected to take off thanks to wireless service providers and the government having laid the groundwork for a strong smartphone foundation, including tax breaks for vendors that create local jobs, greater subsidies from wireless service providers and the successful roll-out of LTE networks.
While growth in Britain has slowed, it is still expected to be a smartphone volume leader over the next few years given the ongoing transition to LTE networks and continued high carrier subsidies.
“From a growth percentage, it is going to be moving pretty slowly in the U.S.,” Mr. Llamas said. “A majority of mobile phone sales are already smartphones – that happened in 2011.
“If you look at how the market is developing, iPhone is showing some age,” he said. “Android is one of the most effective, widespread ways to get your message out.
“BlackBerry and Windows Phone are going to be making some strides in the U.S. in the years to come. Now is the time to get in on the ground floor and develop beachhead before everybody else dives in.”
Chantal Tode is associate editor on Mobile Marketer, New York
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