Smartphones expected to outship feature phones for first time in 2013, says IDC

More smartphones are forecast to be shipped globally than feature phones in 2013, the first such occurrence in the mobile phone market on an annual basis, according to IDC. Handset vendors will ship 918.6 million smartphones this year, or 50.1% of the total mobile phone shipments worldwide.

Smartphone prices have fallen globally, the smartphone strata are wider than ever, and the roll-out of data-centric fourth-generation (4G) wireless networks are three factors that have made these "do-it-all" devices an increasingly attractive option for users. By the end of 2017, IDC forecasts 1.5 billion smartphones will be shipped worldwide, which equates to just over two-thirds of the total mobile phone forecast for the year due to these primary factors.

To date, much of the world's smartphone shipments were a direct result of demand in mature economies such as the US. The balance of smartphone demand is gradually shifting, however, to emerging markets where smartphone user bases are still relatively small and economic prospects are considerably higher. Smartphone shipments to China, Brazil, and India will comprise a growing percentage of the device type's volume in each forecast year. Smartphone demand is burgeoning in these large, populous nations as their respective economies have grown; this has made for a larger middle class that is prepared to buy smartphones. China, which supplanted the US last year as the global leader in smartphone shipments, is at the forefront of this shift.

China will easily remain the world's largest market for smartphones, specifically low-cost handsets based on the Android operating system and to a lesser degree iOS. While shipment volume to the country will remain at the top, growth will slow towards the end of the forecast period. Also, smartphone prices are expected to fall amid increased competition. Consequently, China's share of the global smartphone market will be diluted somewhat as more smartphones are shipped to India, Brazil, and other emerging markets.

Now that smartphone users constitute the majority of all mobile phone users in the US, IDC expects slower growth in the years ahead. Underpinning its growth is the constantly shifting operating system landscape, in which resurgent BlackBerry and Windows Phone aim to gain salience against incumbents Android and Apple iOS.

India's year-over-year smartphone shipment growth will be the highest among the top countries by a wide margin as the vast majority of the country's wireless subscriber base currently use feature phones. The smartphone market will grow due to a variety of factors including greater availability of low-cost devices and additional sales emphasis by top-flight vendors on less populous parts of the country. In addition, 3G network coverage will continue to expand while 4G networks are expected to stimulate smartphone growth from 2015 onwards.

Brazil's smartphone market rise is driven by a confluence of circumstances, such as tax breaks for vendors that create jobs via local mobile phone production. Wireless service providers are offering greater subsidies to drive smartphone sales with an eye on higher data revenue streams in the future. The successful rollout of Long-Term Evolution (LTE) networks in Brazil is key to the country's smartphone market growth.

Growth of the UK smartphone market has slowed considerably in recent quarters as penetration has risen and economic growth remains minimal at best, which has led to consumer trepidation. The size of the market and its wealth relative to much of Western Europe will make it a smartphone volume leader over the forecast given the ongoing transition to LTE networks and continued high carrier subsidies.

IDC: smartphone shipments and market share by country, 2013 and 2017 (m units)
Country*	2013 shipments	2013 market share	2017 shipments	2017 market share	2017/2013 growth
1. China	301.2	32.8%	457.9	30.2%	52.0%
2. USA	137.5	15.0%	183.0	12.1%	33.1%
3. United Kingdom	35.5	3.9%	47.5	3.1%	33.8%
4. Japan	35.2	3.8%	37.7	2.5%	7.1%
5. Brazil	28.9	3.1%	66.3	4.4%	129.4%
6. India	27.8	3.0%	155.6	10.3%	459.7%
Others	352.5	38.4%	568.1	37.5%	61.2%
Total	918.6	100.0%	1516.1	100.0%	65.0%

Source: IDC, compiled by Digitimes, March 2013
* Countries are listed by 2013 rank, based on unit shipments. The 2017 ranking is forecast to be: 1. China, 2. USA, 3. India, 4. Brazil, 5. United Kingdom, 6. Japan.