Clever gadgets to account for two thirds of world's mobile market by 2020
Smartphones will account for two out of every three mobile connections globally by 2020, according to a major new report by GSMA Intelligence, the research arm of the GSMA.
The devices currently account for one in three mobile connections, representing more than two billion mobile connections in total. The report forecasts that the number of smartphone connectionswill grow three-fold over the next six years, reaching six billion by 2020, accounting for two thirds of the nine billion mobile connections by that time. Basic phones, feature phones and data terminals such as tablets, dongles and routers will account for the remaining connections. The study excludes M2M from the connections totals.
'The smartphone has sparked a wave of global innovation that has brought new services to millions and efficiencies to businesses of every type,' said Hyunmi Yang, chief strategy officer at the GSMA. 'As the study released today shows, smartphones will be the driving force of mobile industry growth over the next six years, with one billion new smartphone connections expected over the next 18 months alone.
'In the hands of consumers, these devices are improving living standards and changing lives, especially in developing markets, while contributing to growing economies by stimulating entrepreneurship. As the industry evolves, smartphones are becoming lifestyle hubs that are creating opportunities for mobile industry players in vertical markets such as financial services, healthcare, home automation and transport.'
The developing world overtook the developed world in terms of smartphone connections in 2011 and today accounts for two in every three smartphones on the planet, according to the study. It is predicted that by 2020, four out of every five smartphone connections worldwide will come from the developing world.
Asia Pacific today accounts for about half of global smartphone connections, even though smartphone penetration in the region is currently calculated at below 40 per cent. The Asia Pacific total is boosted by the inclusion of China, the world's largest smartphone market, with more than 629 million smartphone connections.
In many developed markets, smartphone penetration is approaching the 70% to 80% ‘ceiling' at which growth tends to slow. According to the report, smartphone adoption is forecast to reach 75% in Europe and North America by 2020. Smartphone growth in these two regions has slowed in recent years; smartphone connections grew by 35% in North America and by 39% in Europe between 2010 and 2013, compared to growth rates of over 80% during the period in Asia Pacific and Latin America.
The top five countries worldwide with the highest smartphone adoption rates today (as a percentage of total connections) are Qatar, the UAE, Finland, South Korea and Norway. By contrast, Sub-Saharan Africa currently has the lowest smartphone adoption rate worldwide, at 15%, but is expected to be the fastest growing smartphone region over the next six years as affordable devices become more widely available and mobile broadband networks are deployed across Africa.
Among factors influencing growth in the global smartphone market is the rapid erosion of the average selling price (ASP) of smartphones, which is accelerating user migration from basic and feature phones to smartphones. Demand for low end smartphones is driving volume growth, with sub-$50 smartphones becoming a reality. Also operator-branded smartphones sold via operator retail channels is a key trend driving the low end segment, while operator subsidies continue to play an important role in driving the adoption of high end devices, but are being scaled back at lower price tiers.
