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Developing Markets Hinder Growth of Global Smartphone Shipments

TMCnet Feature

May 01, 2014

Developing Markets Hinder Growth of Global Smartphone Shipments

By Frank Griffin
TMCnet Contributing Writer

As of the second quarter of 2013 more smartphones are being sold in the world than traditional mobile phones. That tipping point is not only going to change the way we communicate, but it will also provide more access to the Internet to more people. This will eventually provide services to many emerging markets which were previously unavailable. The growth of smartphones is being driven by affordable devices being introduced into the market not only by Chinese makers, but also recognized brands like Nokia.

The new report by Juniper Research (News - Alert) has revealed global smartphone shipments only rose by just one percent quarter over quarter (Q-o-Q ) with a total of 286 million units in Q1 2014. This has been attributed to slow growth in developing markets, and it will continue to impact smartphone shipments through the second quarter, this according to Juniper.

Emerging markets are playing a great role in the pricing strategies of many smartphone manufacturers because the saturation point is still very low compared to mature markets. This has fueled the fall of retail prices for entry level smartphones, which has led Juniper to anticipate the global average selling price to decline at a rate of 3.8 percent annually over the next four years. This decline will be more noticeable in the Indian subcontinent trailed by Africa and the Middle East. Addressing this market requires a diversified portfolio, and Samsung (News - Alert) is known for having phones to address every market in the world, but that didn't help the company this quarter.

This was the first market share decline for Samsung smartphones in four years, but it still accounted for 30 percent of all smartphone shipments globally, with 85 million units. The company is facing pressure from Chinese manufacturers in the low end ofthe market, and Apple (News - Alert) on the high end.

Apple on the other hand posted record shipments with 43.7 million iPhones, but the company's market share fell to 15 percent during Q1 2014. The company’s entry into the Chinese market is beginning to pay dividends and it is expected to continue driving record shipments in the coming year. When you add the anticipated release of the iPhone (News - Alert) 6, it might end up being one of the best years for Apple.

The company that saw the highest shipment growth was Lenovo, with 63.3 percent, even though it has no presence in North America or Western Europe. The company has a strong portfolio of diversified phone lines designed to address emerging and mature markets. With the acquisition of Motorola (News - Alert), many see this company as the brand to watch.

Edited by Maurice Nagle

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