Smartphone demand is booming globally, as new users adopt the mobile internet. The worldwide smartphone market grew by 38.8 percent year over year in the third quarter of 2013 (3Q13), according to the latest market study by International Data Corporation (IDC).
Vendors shipped a total of 258.4 million smartphones in 3Q13, establishing a new record for units shipped in a single quarter by more than 9.0 percent. The previous high was 237 million units shipped in the second quarter of 2013.
In the worldwide mobile phone market (inclusive of smartphones), vendors shipped 467.9 million units in 3Q13 compared to the 442.7 million units shipped in 3Q12, representing 5.7 percent year-over-year growth. Third quarter shipments were up 7.0 percent when compared to the 437.4 million units shipped in 2Q13.
"The third quarter was up substantially over the previous quarter, which was also a record quarter for shipments, showing the real momentum of the smartphone market," said Ryan Reith, program director at IDC.
Price points have declined significantly, driven largely by low-cost Android solutions. This has helped China to become one of the fastest growing smartphone markets in the world, accounting for more than one third of all shipments last quarter. IDC expects this trend to continue going forward.
The Android smartphone platform has created vast opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market. Vendors from outside the top 5 continue to control nearly half the worldwide smartphone market in terms of shipments.
Beyond Samsung and Apple at the top of the rankings is a tight race of vendors trying to break out from the pack. In 3Q13, Chinese vendors Huawei and Lenovo moved past LG, and not far behind are two more Chinese companies, Coolpad and ZTE.
Any of these vendors could change position again next quarter. But in addition to having close shipment volumes, they all have one key ingredient in common -- Google Android. This has been a huge factor in their success, but it also speaks to the challenges of differentiation on the world's most popular mobile platform.
Looking ahead, IDC anticipates strong momentum going into the fourth quarter, and another record-setting period in the worldwide smartphone market. With already strong growth in 3Q13 and multiple vendors launching flagship models, the market will be poised to reach one billion units for the end-of-year.
It's a significant milestone considering the market shipped just half a billion units in 2011. Moving forward, what remains to be seen is how the various companies and platforms will stay differentiated and relevant in this increasingly competitive global market.