Tag: mobile phone sales

Emerging markets are continuing to exhibit positive growth, but as a whole it is declining in developed regions.

According to the Worldwide Quarterly Mobile Phone Tracker from the International Data Corporation (IDC), smartphone sales are declining as expected. Many forecasts pointed to an overall slowdown of mobile phone sales in 2016. This is linked to a reduction in sales in developed regions.

Despite the positive growth that continues in emerging markets, it isn’t enough to keep the entire marketplace’s pace.

The report showed that much of the smartphone sales currently occurring in developed regions is in replacements. The rate of new users has decreased substantially as penetration within these populations is now very high. The report predicted a 1.6 year over year growth of smartphone shipments in 2016. This, upon the shipment of 1.46 billion units by the end of the year. That may appear to be a healthy number, but it is a fraction of what it was last year. In 2015, the year over year growth rate for smartphone shipments was 10.4 percent.

As a whole, developed markets are expected to see a negative growth rate in smartphone sales.

The report took the United States, Canada, Western Europe and Japan into its definition of developed markets. Within that region, the IDC predicts a -0.2 percent compound annual growth rate (CAGR). Emerging markets were made up of Central and Eastern Europe, the Asia Pacific Region (except for Japan), Africa, the Middle East and Latin America. They are expected to see a 5.4 percent CAGR throughout the forecast period of 2015 to 2020.

Senior IDC research analyst at the Worldwide Quarterly Mobile Device Trackers, Jitesh Ubrani, said “Growth in the smartphone market is quickly becoming reliant on replacing existing handsets rather than seeking new users.” Ubrani also stated that from the point of view of the tech side, innovation is “in a lull.” Consumers have greatly reduced their inclination to purchase the latest device with all the newest bells and whistles. Instead, they are satisfied with mobile devices that are “good enough.”

Telcos have been working hard to breathe life back into their smartphone sales. Programs such as trade-ins and buy-backs are geared toward shortening lifecycles and increasing the inclination to purchase early replacements.

A report from IDC has showed that even as it matures in some countries, others are still taking off.

The IDC has now released its report on the growth of the smartphone market for 2014 and it has shown that while mature marketplaces are forecasted to grow by only 4.9 percent, emerging regions are expected to keep up a tremendous rate of 32.4 percent.

Some of the regions of the world are experiencing faster growth than the average reported by IDC.

According to the report, the Indian smartphone market saw a massive 300 percent growth rate in 2013. As only 10 percent of the over 700 million users of cell phones had smartphones at that time, it was only natural that the growth rate be exceptionally high. By the first quarter of this year, the penetration rate of these mobile devices had already reached a much higher 29 percent.

In emerging countries, the dynamics of the growth of the smartphone market are different than in mature regions.

For instance, many emerging marketplaces do not have a broad scale fixed line infrastructure. Therefore, this means that it provides an ecosystem that is much more favorable for the use of mobile broadband technologies for the delivery of high speed internet connections than is the case in mature markets, where that infrastructure is considerably better established.

The demand within emerging regions is, therefore, driving growth in both smartphone shipments and in mobile broadband subscriptions. Two very large and yet highly different examples of this occurrence are going on in India and in China.

In China, the China Internet Network Information Center (CNNIC) reported that at the end of 2012, there was a 74.5 percent growth in mobile internet users to the most recent figure, which is 81 percent. Clearly, this is a notably higher growth rate and the CNNIC is calling the smartphones the primary driving force for internet use in the country.

On the other hand, in India, Mary Meeker from Kleiner Perkins, indicated in the report called the 2014 Internet Trends that while smartphone use is tremendous, revenues are very large, and the opportunity is considerable, companies are still seeing tiny margins. At the moment, only 4 percent of the budgets of advertisers in the country is being spent on advertising in the smartphone market.