Here's Where The Next Wave Of Smartphone Growth Will Come From

Smartphones are quickly becoming the world's dominant computing device — with more than 1 billion currently in use — and the market shows no sign of slowing down anytime soon.

Worldwide smartphone shipments rose 43% last year to 675 million. That's a deceleration of growth from 2011, when shipments grew 57%, but a slowdown should be expected in a scaling market. As smartphone penetration deepens, it will be price-sensitive global customers that will increasingly drive the next wave of growth.

In a new report from BI Intelligence, we revisit our smartphone market forecast, look at the factors that will drive consumer purchase decisions in the next wave of growth, and examine which companies stand to gain the most.

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Here's a brief overview of how global customers will shape the next wave of smartphone growth:

• Smartphone shipments will increase again this year: We project 908 million shipments this year. This will account for 51% of all cell phone sales - a significant milestone for the smartphone market. We forecast 1.5 billion annual smartphone shipments by 2017. Our estimate is higher than those of other research services, as we believe many projections underestimate the spread of ultra low-cost smartphones in the developing world. The feature phone market has already begun to crumble.
• Emerging markets will see the next wave of adoption: Major markets like the U.S. and Europe are heading towards saturation and have limited upside. As we've discussed before, countries like Brazil, Russia, India, and China are the smartphone market's future.
• Consumers in these economies, broadly speaking, are less wealthy than current smartphone owners: Even U.S. and European smartphone buyers are surprisingly price-aware, and late adopters will tend to have lower incomes. The manufacturers, carriers, and platform providers that will grow most will provide a quality smartphone experience to these price-sensitive consumers.
• China is primed to lead this growth: Chinese smartphone manufacturers, reared in a low-income environment, are ready to lead the push into emerging markets. The success of these companies is built on sales of low-cost smartphones to less wealthy consumers, beginning domestically and gradually working their way into other markets.

In full, the report:

• Detail the current size and state of the smartphone market
• Revisit our smartphone market forecast and update our shipment projections
• Look at the factors that will drive consumer purchase decisions in the next wave of growth
• Examine which companies stand to gain the most.

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