Smartphone outlook remains strong, despite slowing growth in Western markets

Smartphone outlook remains strong, despite slowing growth in Western markets

Summary: The Western smartphone market is slowing, thanks in part to almost everyone owning one nowadays. But the outlook still looks strong, thanks to Android in emerging markets.

(Image: CNET/CBS Interactive)

Latest research data points to a strong global smartphone market in the years ahead, despite saturation levels in Western markets, particularly Europe and the U.S.

Research firm IDC said on Thursday that it estimates more than 1.25 billion smartphones will be shipped this year, an increase of close to 24 percent from 2013. That figure is expected to grow to 1.8 billion shipments by 2018.

Emerging markets have been "crucial" in spurring the growth, accounting for more than 50 percent of all annual smartphone shipments since 2011, the firm said. But mature markets will continue to slow by shy of 5 percent growth for 2014. 

Screen Shot 2014-08-28 at 12.04.30 PM
(Image: IDC)

"The smartphone market, which has experienced runaway growth over the last several years, is starting to slow," IDC's Ramon Llamas said in prepared remarks.

"The key for vendors now is to maintain a presence in the higher-margin mature markets, while establishing a sustainable presence within the fast-growing emerging markets," he said. "To enable this strategy, operating system companies are partnering with OEMs to provide low-cost handsets."

Emerging markets will grow to 921 million devices this year, accounting for just over 73 percent of all smartphones shipped. IDC said the catalyst is Android, which will take on about 88 percent of the entire market.  

IDC's Ryan Reith said in remarks that Google has received support from over 150 handset manufacturers, which has resulted in a massive spike in the platform's market share.

"With Google's recent announcement of Android One, they hope to change this by laying out a set of standards for manufacturers to follow," he added. 

Topics: Smartphones, Mobile OS, Mobility

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  • Higher margin going away

    What always happens when a market matures is the high margin pretty much goes away. There's really just no reason to pay $1,000 in up front and in contract costs for a phone anymore.
    Buster Friendly
  • Yep! The foreign markets, where phones sell for $20-100 and prospects for

    unit sales are tremendous, yet, the prospects for earnings growth continue slowing down, with each unit sold.

    The OEMs can't be falling all over each other trying to outdo each other in sales to those "emerging" markets, and only the government subsidized players will have "decent" sales.