Thursday, September 06, 2012

China is Now the Leading Market for Smartphones

End-user demand and a desire for lower-priced smartphones will make China (PRC) the largest market for smartphones this year, overtaking the United States as the global leader in smartphone shipments.

According to the latest market study by International Data Corporation (IDC), China will account for 26.5 percent of all smartphone shipments in 2012 -- that's compared to 17.8 percent for the United States.

"Looking ahead, the PRC smartphone market will continue to be lifted by the sub-$200 Android segment," said Wong Teck-Zhung, senior market analyst at IDC Asia-Pacific.

Near-term prices in the low-end segment will come down to $100 and below as competition for market share intensifies among the primary smartphone vendors. Carrier-subsidized and customized handsets from domestic vendors will further support the migration to smartphones and boost shipments.

Looking ahead to the later years in the forecast, the move to 4G networks will be another growth catalyst.

"Regionally, we expect smartphone demand to flow down to lower-tier cities," added James Yan, senior market analyst at IDC China.

After going through a period of sustained high growth, top-tier cities are likely to see decelerating smartphone growth rates. In contrast, secondary cities are expected to experience accelerated smartphone growth, with strong demand for low-cost models as well as high-end models, which are desired as status symbols.

IDC belives that the fact that China will overtake the United States in smartphone shipments does not mean that the U.S. smartphone market is grinding to a halt.

Now that smartphones represent the majority of mobile phone shipments, growth is expected to continue, but at a slower pace. There is still a market for first-time users as well as device upgrade opportunities.

In addition to China and the United States, several other countries will emerge as key markets for smartphone shipment volume over the next five years.

High-growth countries such as Brazil and Russia will become some of the most hotly contested markets as mobile device manufacturers seek to capture new customers and market share.

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