You might think that everyone and their dog who wanted a smartphone would have one by now. You'd be wrong. IDC found that "Despite high saturation rates in a number of mature markets, the overall smartphone space grew 39.9 percent year-over-year in the third quarter."
Android's vendors did particularly well with this increase. IDC found that Android reached its 81 percent market-share thanks "to its broad and deep list of vendors, including four of the top five vendors worldwide."
Samsung, in a renewed legal battle with Apple, accounted for 39.9 percent of all Android shipments for the quarter. The rest of the Android vendors claimed single-digit market share, and most of them had less than 1 percent market-share.
How did the iPhone and its iOS operating system decline despite such a successful launch of the iPhone 5s? IDC reported that even though Apple saw its total volumes increase and it reached new record third quarter volumes, Apple's global market share still declined to 12.9 percent for the quarter. IDC speculates that this was "due to soft demand in the weeks leading up to the launch of iOS 7 smartphones. Still, if the 9 million units sold during the last week of September is any indication of future adoption, iOS stands to reap another record quarter in terms of volumes, market share, and year-over-year growth."
As for the Windows Phone, it finally has a secure hold on a very, very distant third place with 3.6 percent. Still, Microsoft's Windows Phone grew a market-best 156 percent year over year. As IDC noted, "Granted, volumes started from a small base of 3.7 million units a year ago and overall market share is still less than 5 percent. But Microsoft's efforts, with Nokia's support behind it, helped drive the platform into multiple tiers and price points."
Indeed, Windows Phone's growth has been almost entirely because of Nokia, which Microsoft recently purchased for 5.44 billion euros. IDC found that "By itself, Nokia accounted for 93.2 percent of all the Windows Phone-powered smartphones shipped during the quarter, marking a new milestone in the company's short history on the Microsoft platform. Participation from other vendors, meanwhile, still seemed a mixed bag with more vendors participating from a year ago, but volumes still far behind Nokia's own."
IDC stated that the beleaguered smartphone company "recorded the largest year-over-year decline among the leading operating systems during 3Q13. Underpinning its results was softer demand for its new BB10 operating system and continued demand for its older BB7 within emerging markets. Now, with a new CEO in place and an infusion of $1 billion, what remains to be seen is how and when the beleaguered operating system will be able to change course in the face of mounting pressure from Android, iOS, and Windows Phone."
"Android and Windows Phone continued to make significant strides in the third quarter. Despite their differences in market share, they both have one important factor behind their success: price," said Ramon Llamas, Research Manager with IDC's Mobile Phone team in a statement. "Both platforms have a selection of devices available at prices low enough to be affordable to the mass market, and it is the mass market that is driving the entire market forward."
At the same time, IDC found that smartphone average selling prices (ASPs) have continued to decline as the appetite for more affordable devices grows. ASPs were down 12.5 percent in 3Q13. Now, the average price of a smartphone is $317.
Simultaneously, the market has seen a large influx of large-screen smartphones (5- to 7-inch screens), also known as phablets. Large-screen devices generally come with a higher selling price than smaller screen devices, due to the need for more powerful and expensive components. Phablet ASPs in 3Q13 were notably higher than the market average at $443. However, the 3Q13 ASP was down 22.8 percent from the $573 phablet ASP in 3Q12.
"Almost all successful Android vendors have added one or more 5-7-inch phablets to their product portfolios," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker in a statement. "And, Nokia’s recent announcement of the Lumia 1320 and 1520 put them in the category as well. In 3Q13, phablet shipments accounted for 21 percent of the smartphone market, up from just 3 percent a year ago. We believe the absence of a large-screen device may have contributed to Apple's inability to grow share in the third quarter."