Smartphone avg selling price drops while growth reaches 33%

Smartphone avg selling price drops while growth reaches 33%

Summary: Smartphone prices are expected to drop another 9 percent in 2013 after an 8 percent drop in 2012. As we approach nearly 1 billion smartphone units shipped, emerging markets are buying smartphones as their computing platform of choice.

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It's good news for consumers when smartphone pricess drop and as I wrote last week you can still pick up perfectly capable devices for minimal cost. IDC just released their latest forecast that shows an expected 32.7 percent growth in smartphone shipments with a 9 percent drop in average selling price.

We will approach nearly 1 billion units in 2013 and as smartphones pass up feature phones there is no looking back as smartphones become the mobile handset of choice. We even see growth in smartphone sales in emerging markets with a reported 64.8 percent of all smartphone shipped appearing there, up from 43.1 percent in 2010.

Smartphone average selling price (ASP) was $443 in 2011 and in 2013 it is down to $372, with predictions of it dropping to $309 by 2017.

Ryan Reith, program manager for IDC's Mobility Trackers, states:

Smartphones have become increasingly common in emerging markets and it is often the first affordable means of computing for these markets. These are markets where average personal income is far less than in developed markets, and therefore vendors have been forced to create smartphone computing experiences for the low end of the market.

Smartphones today are more powerful than all of our computers just a couple of years ago and as Ryan stated they are now the primary computing platform for many folks around the world.

I appreciate LTE speeds as much as the next enthusiast, however 3G data is just fine for the majority of tasks on a smartphone and this is where manufacturers are still able to cut costs and pass along the savings to consumers.

Topics: Mobility, Smartphones

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13 comments
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  • Don't buy iPhone or or a Samsung S4

    Lets look at the math...

    IPhone or Samsung S4 costs $650

    Nokia Lumia 521 cost just $150...super phone..so we have $500 left....lets see what we can buy with the rest of the money... 1 year xbox music subscription, a high end head set and a Windows 8 Asus touch laptop...

    enjoy shopping...don't waste money on crapple or samdung :-)
    OwlllllNet
    • Wha?

      How is the 521 comparable to high end phones?
      Michael Alan Goff
      • fanboy

        OwlllllNet very fanboy
        Henrique Dourado
        • WP vs IPhone

          Is like a tool vs toy. In developing economies, I think, what counts is a productive tool rather than a toy. Hence, any WP would be useful for that account, who wants to check her spread sheet on the move; or that Software Engineer, who needs to go through product specification, while on the move; or that translator, who need to send back number of translated Word document, while commuting; and so forth.

          Can they do any of the above on iToys. Surely, no - unless they have to pay leg and hand for adaptors.

          We in the developed world, we are already made unproductive by the iToys.
          Wonder.man
          • Spreadsheets

            You can, indeed, check them on an iPhone.
            Michael Alan Goff
          • Wishful thinking

            You said - "In developing economies, I think, what counts is a productive tool rather than a toy."

            You couldn't be more incorrect. In the developing world, the percentage of consumers who need the sort of productivity tools you're describing is far lower than what you would find in Western countries. In the last 10 years, the vast majority of PC purchases made by your average consumer in that part of the world were done primarily to get access to the Internet for information gathering, for long distance communication (to bypass notoriously high International calling rates) and for social networking and entertainment. If you want to find the part of the world where Windows on any device absolutely becomes the least relevant OS to average consumers when faced with competition from smartphones and tablets running Android, look no further than your average developing world country.

            Right now, Windows phone is only getting a small amount of traction in locations where Nokia still has some brand recognition remaining (such as India and parts of Europe). But I can tell you right now that Nokia is no longer relevant in most developing countries because the young people (who are the ones currently propelling smartphone purchases in developing countries) don't have any allegiance to Nokia. In fact, they'd probably buy a Blackberry before they buy a Nokia.

            When it comes to tablets, Windows is not going to take off in most developing markets. It isn't just that the Windows tablets are far too expensive to compete. You have to consider the typical scenario under which tablets, smartphones and PCs are being sold in these developing countries, because that determines how much marketing and mind share each brand gets. Most phones and some tablets (especially the more expensive Galaxy brand) are sold by the various carriers because they offer the best prices and sometimes a little subsidy. There are also a large number of small stores that sell mostly unlocked phones, dual sim phones and accessories such as SD cards and cases. These stores are the ones now selling most of the widely affordable Android tablets. Meanwhile, if you want to see Windows devices, you have to visit a traditional PC shop. That's where a few Windows tablets will be found if at all. So what's the big deal about that? Well, most consumers in the third world don't visit PC stores unless they're actually about to buy a PC or, more commonly, they need to get laptop repairs done. So these PC-centric locations don't see brisk business from your average consumer. But go to a store that sells phones and you see constant foot traffic. The carriers are also pushing awareness of Android tablets and phones by using them in text-to-win promotions and featuring them as the main attraction in display cases. Windows is losing whatever little sway it had with consumers in developing countries because the presense of Android in the mobile storefronts and the way that Windows devices are being sold is allowing Windows to be perceived as a tool for the business folks that the regular consumer can now willingly ignore.
            eMJayy
  • Who Said The Market Is "Saturated"?

    Look at that continuing exponential growth. The only vendors having trouble in a market like this are those trying to palm off overpriced, underperforming products.

    Microsoft, I'm looking at you.
    ldo17
    • "overpriced"

      You do know most Windows Phones are actually fairly cheap, right?
      Michael Alan Goff
      • Re: You do know most Windows Phones are actually fairly cheap, right?

        Compared to feature-equivalent Android models? No.
        ldo17
        • Those

          craps are not even phones. Seriously, you think those cheap Chinese phones are superior than Nokia's ?? Even sammy is worst. Ever tried to play Subway Surfer on S Duo ?? You'll know the truth. Honestly, if you want to buy phone below 300$. Buy Nokia's WP. You won't regret, in fact you'll love it.
          Vish2801
          • Re: Those craps are not even phones

            If you are describing "feature-equivalent to Windows" as "craps [which] are not even phones", what are you saying about Windows?
            ldo17
        • Huh?

          Yeah, compared to feature equivalent Android phones they're cheaper.
          Michael Alan Goff
  • Matthew

    Your comment about phones being more powerful than computers from just a few years ago is terrible. Sure-perhaps a low end system compared with a high end phone. That's not really apples to apples though. If you are implying that a first gen i5/i7 with a separate, dedicated graphics card is even a thought from an ARM processor, just stop. My ex-top of the line quad core processor from 2008 still beats ARM. I'm not even using a top end graphics card.

    I'd love to see your comparisons, bench marks, etc. I think you are being blinded by your love of mobile, but it just isn't there yet...to yesterdays standards.
    ikissfutebol