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Smartphone sales continue to soar despite tough competition

Posted: 15 Dec 2014     Print Version  Bookmark and Share

Keywords:mobile communication  smartphones  wearables 

Industry players can expect continuous growth in low-, high-end and mid-range mobile phone segments in the coming years, according to market analysts. This positive scenario bodes well for makers and vendors, particularly those targeting huge markets found in India and China.

Ajay Sunder, VP of ICT—Frost & Sullivan (Asia Pacific), says that both the low-end and mid-range market can expect stiffer competition in the next two to three years, while high-end phones will remain a niche market where Samsung and Apple continues to dominate as well as dictate price points.

Gartner Principal Research Analyst CK Lu believes that Chinese and Indian brands will continue to dominate in the low-end segment. "Some vendors like Vivo, Huawei and Oppo will be able to move up tiers to sell more premium phones," he says.


Lu: Chinese and Indian brands will continue to dominate in the low-end segment.

What these facts covertly declare is that although mobile phone vendors in the lower end will have to slug it out over price and volume, they can expect revenues to go up in the next few years.

In India, for example, IDC Senior Market Analyst Kiranjeet Kaur expects <$100 price segment to account for almost 60 per cent of the total smartphone sales in 2018, as compared to 35 per cent in 2013. She adds, "The focus will be on good-enough specs and performance that has mass-market appeal but is within price reach of a large segment of users."

Another IDC study sees the smartphone market, after having reached one billion units shipped last year, to increase 19.3 per cent this year and reach 1.2 billion units shipped. By 2018, total smartphone shipments will reach 1.7 billion units, resulting in a CAGR of 11.5 per cent.

Ajay Sunder

Sunder: The high-end phones will remain a niche market.

"The worldwide smartphone market is heading for certain growth, although we are starting to see that growth beginning to slow down in the latter years of our forecast," says Ramon Llamas, research manager with IDC's Mobile Phones team.

Lu also imagines that smartphones will soon reach saturation, so the real question that phone vendors should be asking themselves is, how can they grow new revenue outside smartphones? "We believe there are still revenue opportunities such as wearable, consumer analytics [and] service/application," he says.

Sunder holds the same expectation. The analyst from Frost feels that many of these vendors will try to get into connected devices, particularly into wearable computing. He even mentions a specific scenario for an Indian brand: "For example, a Micromax phone with a MIcromax [smart] wristwatch, and [consumers can] get the whole thing with a discount."

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