Smartphone Market Growth Gets Boosted by Increased Users

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Jun
02
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The smartphone market weighs billions and is a rough battleground for all smartphone makers. Hard to imagine about a decade ago, smartphones were for the rich and tech lovers. Many did not see the advantage or difference with existing phones back then. Particularly in the developing world, smartphones took some time to make any sense. But then, they developed rapidly with better designs, increased functionality, and reduced prices. Today, everybody wants a smartphone, some for its utility and others for the prestige it has. In fact, the developing world now accounts for a large part of the smartphone market. Statistics and projections show that the market will continue to grow for the foreseeable future. The number of smartphone users around the world is also set to increase.

This is all good news for smartphone makers and smartphones operating system vendors.

According to Statista, about 62.9% of the world’s population owned a mobile phone in 2016. This should continue growing to about 67% by 2019. China alone accounts for 1.5 billion mobile phone users. The smartphone market makes up a major part of the mobile phones business. Between 2014 and 2018, the percentage of smartphone users within the mobile phones user base is expected to grow from 38% to 50%. Thus the smartphone market will continue to grow at least for the predictable future.

Worldwide smartphone users

Smartphones have made their way through modern society to become almost indispensable. The number of smartphone users continues to increase year after year. The number of smartphone users was estimated at 2.1 billion last year and projected to attain 2.32 billion in 2017. By 2019, the number of smartphone users worldwide should amount to 2.71 billion. These figures make up a considerable part of the expected 5 billion plus mobile phone users worldwide by 2019. According to Statita, 36% of the world’s population will be using smartphones by 2018. Specifically, the two biggest markets -China and US- will fuel the smartphone market.

China remains the biggest smartphone market with strong local brands. According to Statista, about half the population of China will be using a smartphone by 2020. Likewise, the number of smartphone users in the US is expected to grow from 223 million this year to 247.5 million by 2020. All major smartphone vendors will continue to fight for smartphone market share. But then, Android and IOS have a firm grip on the smartphone operating system market. As of the first quarter of 2017, Android and IOS occupied 86.1% and 13.7% of this market.

Smartphone market penetration and growth

The smartphone market boost in 1Q17 should continue with the expanding smartphone user base. From 21.6% in 2014, the global smartphone market penetration is forecast to grow steadily from to 30.9% in 2017 through to 37% by 2020. According to Statista, in 2017, Western Europe will be the largest regional market with 65% of its population owning a smartphone. North America comes next with 64 percent of its population owning a smartphone in 2017, up from 51% in 2014.

The Middle East and Africa remain the smallest regional market with only about 13.6% smartphone penetration.

In the 1Q17 the smartphone market was very encouraging with 380 million unit shipments according to Gartner. Once again, Chinese manufacturers -Huawei, Oppo, and Vivo- are on the front lines. The combined market share of these three as of 1Q17 amounted to 24%, 7 units increase from the same period last year. Apple and Samsung face fierce opposition from Chinese manufacturers. Even with increased pre-orders of the Galaxy S8 and S8 plus, Samsung is still losing market share. Huawei sold 34 million smartphones in the 1Q17 with a large contribution of its P9 and P9 plus. Oppo continued with rapid growth gaining 94.6% increase in worldwide sales in 1Q17. Vivo on its part had an 84.6% growth in the 1Q17, selling 26 million smartphones. The smartphone market as always remains very competitive.

Samsung and Apple which are global leaders have had more sales out of China recently. Yet, China is set to lead the smartphone market for the foreseeable feature.

Already, predictions go that China will control about a third of the global smartphone market in 2017 while the US will accounts for about 21% market share according to Statista. This is mainly because they target the target the fast growing low-end user base in China. Nonetheless, Apple still has a large market share in the high-end user base with about 80% market share. But this part of the market experiences much less growth.

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