Wed, Dec 03, 2014 - Page 15 News List

Smartphone growth slows, prices dropping: analysts


The global smartphone market is set to see cooler growth in the next few years, amid “cutthroat” competition that would bring down prices for many consumers, a market tracker said on Monday.

A forecast by the research firm IDC indicates smartphone sales of 1.5 billion units next year, a rise of 12.2 percent from the current year’s estimate.

That would mean growth falling by more than half from the 26 percent pace of this year.

The sluggish growth is likely to continue through 2018, IDC said, with the average increase over the period just 9.8 percent.

Smartphone prices are said to be likely to drop from an average selling price of US$297 this year to US$241 by 2018.

Emerging markets like India would see much lower smartphone prices — US$135 this year and US$102 by 2018, IDC said.

Smartphone revenues “will be hard hit by the increasingly cutthroat nature of pricing,” growing just 4.2 percent over the same forecast period, IDC said.

“The impact of upstart Chinese players in the global market will be reflected in a race to the bottom when it comes to price,” IDC analyst Melissa Chau said.

“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. The biggest question now is how much lower can prices go?” Chau said.

IDC said Google-powered Android devices would continue to dominate the market, with 80 percent of global smartphones and 61 percent of revenues.

Apple Inc’s iPhones would represent 13 percent of units sold and 34 percent of revenues, the report said.

“As shipment volume slows, we expect greater attention to shift toward value trends,” IDC research manager Ramon Llamas said.

“Apple’s approach with premium pricing ensures a growing portion of overall revenues, despite its declining market share,” he added.

Due to Android’s dominant position, IDC said new operating systems like Tizen and Firefox would have difficulty gaining a foothold and “must bring a radically different appeal to gain any significant traction,” IDC said.

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