Mobile Trends | Research

Smart Phones To Surpass 1 Billion Units This Year

One out of every seven human beings in the world will get a new smart phone this year. According to a new forecast from market research firm IDC, more than 1 billion new smart phones will make their way into consumers' hands in 2013, the first time it will reach that mark in a single year. The total population of the Earth as of this writing is estimated at about 7.1 billion.

Device Shipments
That figure — more than double the volume from just two years ago — represents substantially greater growth than the overall cell phone market. Smart phones will grow 40 percent this year compared with 2012, while the overall mobile phone market will grow just 7.3 percent worldwide to 1.8 billion units.

"Two years ago, the worldwide smartphone market flirted with shipping half a billion units for the first time — to double that in just two years highlights the ubiquity that smartphones have achieved," said Ramon Llamas, research manager with IDC's Mobile Phone team, in a prepared statement. "The smartphone has gone from being a cutting-edge communications tool to becoming an essential component in the everyday lives of billions of consumers."

By 2017, smart phones are expected to reach 1.7 billion unit shipments per year, with overall cell phone shipments reaching 2.3 billion units.

The growth in smart phones, according to IDC, is being driven by two factors: new, cheaper (sub-$200) models and steep up-front discounts on higher-end smart phones that are either subsidized by the manufacturer or effectively amortized over the course of a two-year service contract.

The OS Outlook
For the next five years, Android and iOS will remain the dominant mobile operating systems, IDC predicted. For 2013, Android will power 75.3 percent of all smart phones shipped, while iOS will account for 16.9 percent.

By 2017, the picture will be similar among the top 2: a 68.3 percent share (1.16 billion units) for Android and a 17.9 percent share (304.3 million units) for iOS.

However, in that timeframe, Windows Phone will begin to see growth. This year, Windows Phone will power 3.9 percent of smart phones. By 2017, that will increase to 10.2 percent, representing 173.4 million units.

According to IDC: "Windows Phone will solidify its position as the [No. 3 OS] with incremental share gains over the course of the forecast. With the acquisition of Nokia's device and services unit, Microsoft will increasingly need to drive share gains by itself as OEM support for Windows Phone is expected to wane now that the company is set to become a full-fledged hardware maker. Microsoft will also need to ship more low-cost smartphones to high-growth emerging markets if it is to continue building on its recent nominal share increases."

BlackBerry will continue to exist by 2017, holding on to 1.7 percent of the market, IDC predicted. That's off one point from BlackBerry's forecast share for 2013.

"Underpinning the smartphone market is an evolving market for operating systems," said Llamas. "We believe Android and iOS will remain the clear number one and two platforms, respectively, throughout our forecast. What remains to be seen is how Windows Phone and BlackBerry's respective futures will play out pending their recent announcements. Windows Phone has inched ahead of BlackBerry during the first half of 2013, and we believe that will extend into the future. However, overall shipments will continue to trail those of Android and iOS."

"Smartphones will represent virtually all of the mobile phone market in many of the world's most developed economies by the end of 2017," said Kevin Restivo, senior research analyst with IDC's Worldwide Mobile Phone Tracker program, in a prepared statement. "Aggressive carrier subsidies of handsets, falling prices, higher consumer awareness, and a vast array of devices will mean almost all phones shipped to the developed world will be 'smart.' However, smartphone shipment volume will be dominated by emerging markets, such as China, even though the percentage of smartphones to feature phones won't be as high."

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