Global smartphone shipments are expected to reach 958.8 million units this year, up 32.7 percent over last year’s 722.5 million units.
According to the latest IDC report, smartphones will outsell feature phones for the first time this year, marking a watershed moment for the industry. The positive trend will continue for years to come and the focus is now shifting to emerging markets. In fact, emerging markets will account for 64.8 percent of all smartphone shipments this year, up from 43.1 percent in 2010.
IDC says demand has spread from developed markets to emerging markets. Because of this, average selling prices (ASPs) for smartphones declined to $372 for 2013, down from $407 in 2012 and $443 in 2011. ASPs could drop as low as $309 by 2017, IDC believes, with emerging market demand the main catalyst in this change. "Computing at such low end-user cost has posed many challenges to handset OEMs and component suppliers,” IDC said.
In other words, the smartphone market is growing at 33 percent year-over-year, while average prices are dropping eight to nine percent a year.
However, the cost cutting underlines another trend – the shift toward “good enough” computing. As smartphones mature, fewer consumers will be willing to go for ultra high-end phones. This is especially true for cash strapped emerging markets and European markets that are suffering financially.
The upside? As ASPs plummet, people who actually assemble smartphones will finally be closer to affording them.