Smartphone Shipments Topped 1 Billion in 2014, an Annual First, Researchers Say

Smartphone shipments vaulted to a record level in Q4 on seasonality, strong end-user demand and a “deep selection of models,” said preliminary data released Thursday from IDC. Vendors shipped 375 million units during Q4, according to the IDC Worldwide Quarterly Mobile Phone Tracker, up 28 percent over the year-ago quarter and 12 percent growth over Q3. For the year, 1.3 billion smartphones shipped, IDC said, up 28 percent from 2013. Juniper Research said it was the first year global smartphone shipments exceeded 1 billion units, at 1.2 billion. It said the iPhone 6 and 6 Plus sold more iPhones in China than in the U.S. for the first time. Despite closing in on Samsung in Q4, Apple had a worldwide market share of 15 percent for 2014. The iPhone was the star of Apple's most recent quarter, CEO Tim Cook said earlier this week (see 1501280031). Both market research firms cited a narrowing gap between No. 1 smartphone maker Samsung and rival Apple. IDC said Apple cut the volume gap to 600,000 units in Q4 and said continued success -- along with challenges to Samsung from low-cost, low-margin Android smartphone makers -- could enable Apple to overtake Samsung as shipment leader sometime during 2015. For Samsung to hold on to the top spot, “it will either have to accept lower margins from here forward or revamp its high-end strategy to compete with Apple,” IDC said. While year-over-year smartphone unit growth slowed from 40 percent in 2013 to 27 percent last year, “the market clearly has legs,” IDC said. Growth is forecast to decline to the mid-teens this year, “but opportunity exists” as a large segment of the world population hasn't yet acquired a mobile phone or stepped up to a smartphone, IDC said. "Mature markets have become increasingly dependent on replacement purchases rather than first-time buyers, which has contributed to slower growth,” Ramon Llamas, research manager, said. In emerging markets, first-time buyers have provided momentum to the smartphone market, but “the focus has shifted toward low-cost devices, creating a different dynamic for both global and local vendors,” Llamas said. Facing increased pressure from Apple at the high end and from Chinese manufacturers Huawei, Xiaomi, ZTE and others at the mid- to low end, Samsung is facing a “multi-front battle” and has streamlined operations and its product portfolio to position itself more competitively, IDC said. Apple sales were up 44 percent in the U.S. to 74.5 million and up 97 percent in Brazil, Russia, India and China, IDC said. It “remains to be seen how long Apple can sustain this runaway growth,” IDC said. Juniper said the reception of the iPhone 6 Plus indicates “a large potential for Apple phablets” and will likely accelerate the trend toward bigger smartphone screens.