Falling smartphone prices in emerging markets to drive 1 bn sales: study

Research firm IDC says Asia Pacific will also experience some market share growth from 2013 to 2017

Emerging markets like Asia Pacific would drive the growth in smartphone sales in the next four years, as mass markets such as India and China are expected to see fall in prices of such handsets, says research firm IDC.

The research firm expects global smartphone shipments to surpass a billion units this calendar year and 1.7 billion by 2017 aided by steady decline in average selling prices (ASPs) and emerging markets, including Asia Pacific, Latin America, and Middle East and Africa (MEA) contributing in volumes.

From a volume perspective, emerging markets including Asia Pacific, Latin America, and Middle East & Africa (MEA) will all post market-beating growth rates from 2013 to 2017. Asia Pacific will also experience some market share growth from 2013 to 2017, IDC said.

"The key driver behind smartphone volumes in the years ahead is the expected decrease in prices," IDC Mobile Phone Team Research Manager Ramon Llamas said.

Particularly in emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass market users, he added.

The firm expects smartphone shipments in Asia Pacific to touch 528.2 million units this year and 986 million units by 2017.

From a price perspective, ASPs in emerging markets will post single-digit CAGR declines from 2013 to 2017, led by Asia Pacific enabling more users to afford smartphones for the first time and in many cases, allow users to bypass purchasing feature phones altogether and go straight to smartphones.

"A number of trends co-exist in the global smartphone market, but none have more of an affect on driving market growth than the steady decline in ASPs," IDC said.

The firm forecasts that ASP in Asia Pacific will decline to $215 per unit by 2017 from $262 a unit in 2013.

Earlier, IDC in a survey had said that smartphone sales are expected to extend their strong growth trend in 2013 with some 918 million units worldwide, led by gains in big emerging markets China, Brazil and India.

IDC said the growing middle classes in China, Brazil, and India are driving up smartphone sales.

India is expected to become the number three market for smartphones by 2017, and Brazil will be fourth, as those countries overtake mature markets like Japan and Britain, the firm has said then.