Global smartphone shipments to slow in 2015, India prices to fall: IDC report

Emerging markets like India may see lower smartphone prices, average selling prices to hit fall to $102 by 2018 from $135 in 2014

Smartphone shipments across the globe are expected to cool somewhat in 2015, the International Data Corporation said on Tuesday. According to a new forecast from IDC Worldwide Quarterly Mobile Phone Tracker, 1.4 billion smartphones are expected to be shipped worldwide in 2015, implying an annual growth of 12.2%. In 2014, 1.3 bn units expected to be shipped, a growth of 26% over 2013 shipments. 

Slower annual growth is also forecast through 2018, with unit shipments approaching 1.9 billion by then, resulting in a 9.8% compound annual growth rate (CAGR) for 2014 through 2018. In terms of revenues, the slowdown will likely be more pronounced at 4.2% CAGR in the same period, as intense competition has resulted in price cuts.

"The impact of upstart Chinese players in the global market will be reflected in a race to the bottom when it comes to price. While premium phones aren't going anywhere, we are seeing increasingly better specs in more affordable smartphones. Consumers no longer have to go with a top-of-the-line handset to guarantee decent hardware quality or experience," said Melissa Chau, Senior Research Manager with IDC's Worldwide Quarterly Mobile Phone Tracker. "The biggest question now is how much lower can prices go?"

IDC said that on a worldwide basis, smartphones are expected to have an average selling price (ASP) of US$297 worldwide in 2014, dropping to US$241 by 2018. 

Emerging markets like India will see much lower smartphone prices, as ASPs hit US$135 in 2014 and fall to US$102 by 2018. In contrast, ASPs in mature markets are not expected to change significantly and modestly higher shipment volumes will not drive up overall revenues as each generation of flagship phones shows less and less differentiation from its predecessors.