IDC Sees Global Smartphone ASPs Declining 19% by 2018

IDC sees the Windows Phone operating system more than doubling its share of global smartphone shipments to 5.6 percent in 2018, compared with 2.7 percent this year, the research firm said Monday in its worldwide quarterly mobile phone tracker. In terms of global share, the Windows Phone OS will still pale in comparison with Android (its share will decline to 80 percent in 2018 from 82.3 percent this year) and iOS (12.8 percent in 2018 vs. 13.8 percent in 2014), the firm said. It sees the industry shipping nearly 1.3 billion smartphones globally in 2014, an increase of 26.3 percent over 2013, it said. IDC expects 1.4 billion smartphones to be shipped worldwide in 2015, a 12.2 percent year-over-year growth rate, it said. Slower annual growth continues through 2018, when shipments will approach 1.9 billion units, for a 9.8 percent compound annual growth rate for the 2014–2018 forecast period, it said. "Smartphone revenues reflect a starker picture, as they will be hard hit by the increasingly cutthroat nature of pricing," resulting in a 4.2 percent compound annual growth rate over the same forecast period, it 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. 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?" IDC pegs the average selling price of smartphones shipped globally this year at $297, but sees ASPs dropping by 19 percent to $241 by 2018, it said: "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."