US loses lead in smartphone market

03 September 2012

NEW YORK: China is set to overtake the US as the largest market for smartphones by the end of this year, according to new research.

A quarterly report from International Data Corporation, a market intelligence firm, found that China will account for 26.5% of all smartphone shipments in 2012, compared to 17.8% for the US.

This compares with shares in 2011 of 18.3% for China and 21.3% for the US.

"Now that smartphones represent the majority of [US] mobile phone shipments, growth is expected to continue, but at a slower pace," said Ramon Llamas, senior research analyst with IDC's Mobile Phone Technology and Trends program.

"There is still a market for first-time users as well as thriving upgrade opportunities," he added.

The falling price of handsets in China is also helping drive the shift from the US. Wong Teck-Zhung, senior market analyst at IDC Asia/Pacific, said he expected the Chinese market to continue to be lifted by the sub-US$200 Android segment, adding that "near-term prices in the low-end segment will come down to US$100 and below as competition for market share intensifies among smartphone vendors."

He also noted: "Carrier-subsidized and customized handsets from domestic vendors will further support the migration to smartphones and boost shipments."

Within China, the fastest growth is expected to come in lower-tier cities, with strong demand for low-cost models as well as high-end models, which are desired as status symbols.

The fastest growing markets for smartphones between 2011 and 2016 are forecast to be India, with a CAGR of 57.5%, and Brazil, on 44%, more than twice the global average of 20.5%.

Data sourced from IDC; additional content by Warc staff