China will overtake the United States this year as the biggest purchaser of smartphones, according to IDC, as users in emerging markets sate their hunger for mobile computing on domestically produced, Android-powered devices. India and Brazil, meanwhile, will enter the top five country markets for smartphones by 2016.
Users in China, India, and Brazil are increasingly turning to smartphones, not just for calls but also mobile entertainment, business use, and social networking, according to IDC's March 2012 edition of its Worldwide Quarterly Mobile Phone Tracker. Helping to drive that adoption is the fact that the prices of capable devices have dropped overseas, such as Android smartphones priced below $200 hitting the market. Even lower-cost devices -- as little as sub-$50 -- are necessary to really spur widespread adoption, according to IDC, citing discussions at the recent Mobile World Congress in Barcelona. What's more, carriers in emerging markets will need to come up with ways to offer less-expensive data plans to users.
Depending on who you ask, global smartphone shipments ranged from 472 million to 491 million in 2011. In that same period of time, Android adoption skyrocketed from 30 percent to 51 percent, while Symbian and RIM took big hits: from 32.3 percent to 11.7 for the former and 14.6 to 8.8 for the later. Apple saw its market share grow by 5 percent. By 2016, smartphone sales worldwide could reach the 1 billion mark.
According to IDC, the United States controlled 21.3 percent of the country-level smartphone market share in 2011 and will claim 20.6 percent in 2012. Come 2016, IDC predicts that figure will drop to 15.3 percent. Overall, the United States, along with mature markets like Japan and the United Kingdom, will see continued growth in smartphone adoption. However, their volumes will not keep up with those in emerging markets.
One such market is China, which ended 2011 with an 18.2 percent market share. IDC said that percentage will be 20.7 percent for 2012, for a total of 137 million units. The percentage will dip to 20.2 percent by 2016.
"Emerging domestic vendors will be another important engine of smartphone growth as giants Huawei, ZTE, and Lenovo continue to ramp up with big carrier orders due to their willingness to produce customized handsets," said Wong Teck Zhung, senior market analyst with IDC's Asia/Pacific Client Devices team. "International players like Samsung and Nokia are also expected to drive volume at the low end with cheaper smartphones."
Indeed, Huawei and ZTE saw their worldwide smartphone market share grow in 2011. ZTE's shipments swelled from nearly 30,000 to nearly 57,000, according to Gartner, with a market share shift from 1.9 percent to 3.2 percent. Huawei's shipments increased from around 24,000 to 41,000, a market share surge from 1.5 percent to 2.3 percent. HTC, based on Taiwan, shipped 25,000 units in 2010 and over 43,000 in 2011, a market share increase from 1.5 to 2.4.
By contrast, most of the top smartphone makers experienced significant drops in shipments and market share in 2011: Nokia's dropped from 28.9 percent to 23.8, LG's dwindled from 7.1 percent to 4.9, and RIM dipped from 3.1 percent to 2.9 percent. Samsung held steady at a market share of around 17.6 percent, and Apple did see growth in shipments, with its market share jumping from 2.9 percent to 5 percent.
India, meanwhile leaped from the No. 9 spot in 2011 -- with 2.2 percent market share -- to the No. 3 spot in 2016 with 9.3 percent market share. Low-end phones from Samsung and HTC were big sellers in India in 2011. As with China, India has domestic vendors, such as Micromax, Spice, Karbonn, and Lava rolling out inexpensive phones. In order to keep pace, international vendors will look to invest further in local manufacturing in the coming years, IDC predicts.
Finally, Brazil is on the brink of breaking into the top five list of countries with the most smartphones. At the end of 2011, the country held a 1.8 percent share, putting it in the No. 11 spot. This year, IDC expects Brazil to jump to the No. 10 spot with a share of 2.3 percent. By 2016, the country will hold the No. 4 spot -- ahead of the United Kingdom -- with a share of 4.7 percent.
IDC credits Brazil's rise here to its booming economy, which has helped reduce the country's poverty line. Mobile phone subscribership has exceeded the country's population, according to IDC, and smartphone prices have dropped to less than $300. What's more, carriers have introduced prepaid data plans, an especially critical development in that four out of five mobile phone users in Brazil use prepaid phone lines. "It has essentially opened up smartphones to a new world of customers that otherwise would not have been able to reap the benefits of smartphones," according to IDC.
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