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Friday, November 09, 2012

Exploring the Global Smartphone Market Momentum

The mobile smartphone business has been a key revenue-generating growth story that we've profiled over the last few years. The overall market outlook continues to be bright -- regardless of the continuation of regional economic uncertainties.

Mobile network subscriber growth has slowed dramatically in the saturated markets, voice and text have reached commodity pricing and margins are shrinking -- yet around the world the appetite for new smartphones continues to gain momentum.

Smartphones are fast becoming the device of choice for hundreds of millions of people, and during 2012 the worldwide smartphone shipments will have reached half a billion units in one year.

According to the finding from the latest market study by Portio Research, the mobile handset industry is a $241 Billion business.

The Key Ongoing Growth Drivers

The worldwide mobile subscriber base is expected to reach 6.5 billion by end-2012, taking global mobile penetration to approximately 91 percent. The subscriber base is forecast to increase at a Compounded Annual Growth Rate (CAGR) of 7.3 percent between end-2011 and end-2016, to reach nearly 8.5 billion by the end of 2016.

This growth will be led by markets in Asia Pacific and Africa. During the period 2011-2016, the subscriber base in the Asia Pacific region is expected to grow at a CAGR of 9 percent; while African markets will witness an average CAGR of 9.4 percent during the same period.

The already advanced markets of North America and Western Europe are approaching saturation, with most of the markets already having close to or more than 100 percent mobile penetration now.

During the period 2009-2011 worldwide handset shipments witnessed significant growth. The overall handset market witnessed a Compounded Annual Growth Rate (CAGR) of 15.3 percent during this period and handset shipments reached 1.549 billion in full-year 2011.

The two key factors that led to this growth were:
  • Increasing mobile penetration in the large emerging markets.
  • The rapid growth in popularity of all-new, fully-featured smartphones, driving mobile handset replacement rates through rapid consumer adoption of these new highly-desirable lifestyle devices.

The mobile handset industry is expected to continue this booming growth phase for the foreseeable future. The overall market will grow at a CAGR of 6.8 percent over the period 2011-2016 and the number of annual handset shipments will cross 2 billion in the year 2015. Overall handset shipments are expected to reach 2.1 billion by the end of full-year 2016.

Representing a huge growth opportunity in the worldwide mobile industry, smartphone shipments continue to grow at a far greater pace than regular handset shipments. While the overall handset shipment business is forecast to grow at an impressive CAGR of 6.8 percent over the period 2011-2016, the latest forecast is that smartphone shipments worldwide will average a CAGR of 17.7 percent during the same time frame.

Smartphone shipments, expressed as a percentage of worldwide handset shipments, are forecast to rise quite dramatically. Smartphones accounted for around 31 percent of total handset shipments in full-year 2011, and this figure is expected to rise to reach 39.1 percent in 2012. Worldwide smartphone shipments will reach 1,095 million by 2016 and account for 51 percent of total handset shipments in that year.