Smartphones to Form Two-Third of World’s Market by 2020

1 October 2014

San Diego: A report predicts that in the next 6 years the smartphone market will be driven by growing demands in the developing world, as in the advanced world the smartphone penetration is impending the 70 to 80% “ceiling” at which growth is expected to slow.

Smartphones will justify two out of every three mobile connections worldwide by 2020, as per a major new report by GSMA Intelligence, the research arm of the GSMA. The latest study, “Smartphone forecasts and assumptions, 2007-2020”, finds that smartphones form one in three mobile connections1 now-a-days, standing for over two billion mobile connections. It predicts that the number of smartphone connections2 will rise three-fold over the next 6 years, attaining 6 billion by 2010, justifying two-thirds of the 9 billion mobile connections by that time. Feature phones, basic phones, and data terminals like dongles, tablets and routers will justify the rest of the connections. The study keeps out M2M from the connections totals.

According to Hyunmi Yang, Chief Strategy Officer at the GSMA, the smartphone has flashed a wave of worldwide novelty that has brought innovative services to millions and competencies to businesses of each type. The study illustrates that smartphones will be the source of power of mobile industry escalation over the next 6 years, with one billion new smartphone connections anticipated over the next 18 months.

In the hands of patrons, these devices are enhancing living standards and changing lives, particularly in building markets, while contributing to rising economies by inspiring entrepreneurship. As the industry progresses, smartphones are becoming lifestyle hubs that are generating opportunities for mobile industry players in vertical markets like healthcare, financial services, transport and home automation.

Smartphone Focus Shifts to the Growing World

The rising world surpassed the developed world in terms of smartphone connections in 2011 and currently accounts for two in every three smartphones on the planet, as per the new study. It is anticipated that through 2020, 4 out of every 5 smartphone connections globally will come from the growing world.

Asia Pacific at present accounts for nearly half of worldwide smartphone connections, although smartphone access in the region is presently computed at below 40%. The Asia Pacific is improved by the inclusion of China, the world’s major smartphone market, having over 629 million smartphone connections.

Top 10 global smartphone markets, Q2 2014 (Numbers are by a reputed organization): 

Country                           Smartphone connections (millions)
China                                   629.2
United States of America    196.8
Brazil                                   141.8
India                                    111.0
Indonesia                               95.0
Russian Federation               83.9
Japan                                    66.1
Germany                               48.5
United Kingdom                    45.4
France                                  43.5  

In numerous developed markets, smartphone penetration is impending the 70 to 80% ‘ceiling’ at which growth becomes sluggish. As per the report, smartphone acceptance is estimated to reach 75% in Europe and North America by 2020. Smartphone escalation in these two regions has slowed in present years; smartphone connections rose by 35% in North America and by 39% in Europe between 2010 and 2013, compared to increased rates of more than 80% during the period in Asia Pacific and Latin America.

The best 5 countries globally with the utmost smartphone adoption rates today are Qatar, the UAE, Finland, Norway and South Korea. By contrast, Sub-Saharan Africa presently has the lowest smartphone adoption rate worldwide, at 15%, but is anticipated to be the fastest-rising smartphone region over the next 6 years as inexpensive devices more broadly available and mobile broadband networks are deployed across Africa.

Factors driving the smartphone market

The latest GSMA Intelligence report indicates a number of factors affecting growth in the global smartphone market, like:

  • Fast erosion of the Average Selling Price (ASP) of smartphones is speeding up user migration from basic and feature phones to smartphones
  • Demand for low-end smartphones is motivating volume growth, with sub-$50 smartphones becoming an actuality
  • Operator-branded smartphones sold using operator retail channels is a prime trend motivating the low-end segment
  • Operator subsidies keep on playing a vital role in driving the adoption of high-end devices, but are being scaled back at lesser price tiers
  • The accessibility of 4G-LTE smartphones is affected by the rate of allotment and assignment of 4G spectrum by regulators across the world
  • The accessibility of ‘data-centric’ services and tariffs is stimulating the acceptance of smartphones in both developed and developing economies
  • In the budding world, smartphone adoption is associated to the accessibility of data tariffs customized for cost-conscious prepaid consumers
  • Smartphone growth is negatively influenced by taxation imposed on devices by governments, particularly in price-sensitive developing economies
  • In the emergent world, there is an association between a boost in smartphone adoption and in mobile broadband connections      

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