Making money on smartphones in emerging mkts a challenge: IDC

Even as smartphone sales in the emerging markets have brought cheer to handset makers with growth rate hitting 30% year-on-year, analysts say the real challenge before the companies is to make money on such handsets in the affordable range, research firm IDC said.

 

Buoyed by growing sales in emerging markets, smartphone shipments worldwide hit 327.6 million units in the July- September quarter, up 25.2% compared to 261.7 million units shipped in the year-ago period despite rumours of a slowing market, it added.

 

Quarter-on-quarter the shipments rose 8.7% above the 301.3 million units shipped in April-June quarter of 2014.

 

"We have finally reached a point where most developed markets are experiencing single-digit growth while emerging markets are still growing at more than 30%, collectively," IDC Worldwide Quarterly Mobile Phone Tracker Programme Director Ryan Reith said.

 

In these markets, smartphone price points are making mobile computing possible where it was once expected feature phones to remain dominant, he added.

 

"This is great news for overall volumes, but the challenge has now become how to make money on devices that are quickly becoming commodity products. Outside of Apple, many are struggling to do this," Reith said.

 

A driving force behind the record smartphone volume was the combined effort of the vendors trailing market leaders Samsung and Apple, IDC said.

 

"The next three vendors - Xiaomi, Lenovo and LG Electronics - all posted market-beating growth and with markedly different strategies," IDC Mobile Phone team Research Manager said Ramon Llamas said.

 

This shows that there is still room to compete in this market, whether it be in the low end as Lenovo has done, at the high end where Xiaomi competes or in both as LG Electronics has shown, he added.