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Smartphone Markets: Worldwide Trends, Forecasts and Strategies 2012–2017 Product Image

Smartphone Markets: Worldwide Trends, Forecasts and Strategies 2012–2017

  • Published: December 2012
  • Region: Global
  • 67 Pages
  • Analysys Mason Group

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Affordability is vital in the effort to encourage non-smartphone owners to adopt smartphones.

The smartphone industry is set to change in 2013. Emerging Asia–Pacific will receive more smartphone shipments than Europe and North America combined in 2012. The smartphone market is changing from an elitist high-end device pool to a segmented mass-market ocean of handsets.

This report provides:

- the following forecasts for smartphones:
-- active SIMs
-- shipments by operating system (OS), by region and by handset manufacturer
-- by payment type (prepaid and contract).
- profiles of the regional smartphone markets
- detailed analyst views on Android, iOS, Windows Phone and other OSs
- analysis of the average selling price of smartphones, and ARPU
- details of the cost of owning an iPhone 5 by operator
- smartphone retailing and pricing recommendations for operators
- an impact assessment of smartphone app usage on operators and device vendors.

Data coverage

The Excel data annex provides the data behind the charts in the report and the following data for mobile handset connections and shipments worldwide:
- total handsets
- smartphones
- handset READ MORE >

Executive summary

The smartphone market is changing, as vendors and operators begin to segment customers into three main sub-groups with different needs
Smartphone penetration in the handset SIM base worldwide will more than double in the next 5 years, but will remain below 50%
Apple's iOS and Google's Android will continue to dominate the worldwide smartphone market in the next 5 years
Beyond the forecast: industry players face three key challenges in the smartphone market as handsets, usage and the ecosystem evolve

Recommendations
- Recommendations for operators – capturing and retaining smartphone customers
- Recommendations for operators – monetising smartphone usage
- Recommendations for operators – managing smartphone ecosystems
- Recommendations for smartphone vendors – OS selection and multi-device ecosystems
- Recommendations for smartphone vendors – addressing commoditisation

Worldwide smartphone forecasts and OS shares: Methodology and definitions
Worldwide smartphone forecast 2012–2017: coverage and KPI definitions
Geographical regions covered in this report

High-level forecast methodology: meeting demand and supply assumptions for a more realistic view of the smartphone market
Worldwide smartphone forecasts and OS shares: Demand-based shipment and active devices forecasts
The smartphone share of active handset SIMs will grow to just under 50% by 2017 – 1.4 billion new smartphones will enter the market in that year
Active smartphone SIMs are a better indication of the addressable smartphone user base for service providers than shipments
75% of smartphone shipments will be upgrades in 2017
62% of smartphones will use 4G networks in developed markets by the end of 2017
Operators can use several levers to maximise 4G smartphone penetration
Operators should think about five key priorities when trying to promote 4G adoption in their smartphone base
Worldwide smartphone forecasts and OS shares: Regional splits
Emerging Asia–Pacific will drive more than a third of smartphone demand by 2017
Central and Eastern Europe will catch up with Western Europe in terms of penetration rates, during the forecast period
Smartphone adoption will plateau in North America from 2017 onwards, with penetration flattening out at around 85%
China will have over 200 million active smartphones by the end of 2012, despite low disposable income, no subsidies and limited 3G coverage
Affordability will continue to hinder smartphone adoption in North Africa for the years to come
Worldwide smartphone forecasts and OS shares: OS and vendor market shares
Microsoft will ship almost as many Windows Phone units in 2017 as Apple will ship iPhones in 2012
Chinese manufacturers will capture most of the growth from lower-end customers during 2012–2017, taking market share from other players
Samsung will be the leading Android smartphone vendor throughout the forecast period, but only by a small margin
Despite significant success, Android brings a level of fragmentation to the market, adding complexity to app development
Windows Phone will be the fastest-growing OS in terms of shipments in the next 5 years
Microsoft's Surface device range threatens Windows Phone partnerships
Worldwide smartphone forecasts and OS shares: Smartphone commoditisation
The average selling price of a smartphone declined by EUR300 from 2007 to 2011, which is threatening device profitability
Android is the primary driver of smartphone commoditisation, as a growing number of vendors adopt the OS
The response from competing OSs has been weak: Nokia's strategy is to push Symbian via low-end devices with content bundles
Operator opportunities and challenges in the smartphone market: Capturing the next generation of smartphone users
Smartphone sales have helped operators increase the proportion of customers on contracts in Europe
Smartphone penetration among contract customers is reaching saturation in Europe; growth will come from the prepaid smartphone market
Mobile content and apps are not necessarily the only drivers for smartphone sales
Operator opportunities and challenges in the smartphone market: Lowering smartphone ownership costs: handset subsidies and financing plans
Subsidies and creative tariff strategies are essential for driving high-end smartphone adoption and mobile data usage
Variations in subsidies and packages mean the minimum cost of an iPhone 5 16GB varies between EUR700 (3HK) and EUR1840 (T-Mobile USA)
The next generation of smartphone users will be less sensitive to device subsidies
Operator opportunities and challenges in the smartphone market: Monetising smartphone users: mobile data pricing and 4G
The greatest monetisation potential for operators in their smartphone user base is mobile data access
Smartphones are great drivers of data consumption but the price per gigabyte is set to decrease threatening smartphone user monetisation
If operators are to maximise smartphone monetisation, 4G adoption is paramount, but the value proposition is not always clear to consumers
Operator opportunities and challenges in the smartphone market: Managing device and OS ecosystems
Unlike other handsets, vendors and operators must provide smartphones with OS upgrades, which may have significant cost implications
If a third OS gains enough traction to compete with Android and iOS, it can create opportunities for operators to support transitioning subscribers
However, multi-device ecosystems will limit the number of transitions from one OS to another in the high-end customer segment

About the author

List of figures

Figure 1: Segmentation of the smartphone market beyond 2012, worldwide
Figure 2: Active handset SIMs by handset type and smartphone penetration, worldwide, 2009–2017
Figure 3: Smartphone shipments by OS, worldwide, 2007–2017
Figure 4: Regional breakdown used in this report
Figure 5: Schematic representation of the modelling methodology used for smartphone forecasts
Figure 6: Handset shipments by type, and smartphone penetration, worldwide, 2009–2017
Figure 7: Active handset SIMs by type, and smartphone penetration, worldwide, 2009–2017
Figure 8: Smartphone shipments by type of purchaser, and smartphone shipments per active handset SIM, worldwide, 2010–2017
Figure 9: Active smartphone SIMs by technology, and 4G penetration, developed markets, 2009–2017
Figure 10: 4G smartphone penetration – scenario-based modelling
Figure 11: Five priorities for operators trying to promote 4G smartphone adoption
Figure 12: Smartphone shipments by region, worldwide, 2010–2017
Figure 13: Active smartphone SIMs, and smartphone penetration, Europe, 2008–2017
Figure 14: Active handset SIMs by type, and smartphone penetration, North America, 2008–2017
Figure 15: Active smartphone SIMs, and smartphone penetration, Asia–Pacific, 2009–2017
Figure 16: Active handset SIMs by handset type, and smartphone penetration, Middle East and North Africa, 2008–2017
Figure 17: Smartphone shipments by OS, worldwide, 2007–2017
Figure 18: Share of smartphone shipments by handset vendor, worldwide, 2007–2017
Figure 19: Share of Android smartphone shipments by handset vendor, worldwide, 2011 and 2017
Figure 20: Share of Android devices that have accessed Google Play within a particular 14-day period, by version of Android
Figure 21: Windows Phone smartphone shipments, and growth rate, worldwide, 2011–2017
Figure 22: Microsoft's response to device vendors' ecosystems
Figure 23: Average selling price by handset category, top-10 handset vendors by volume of shipments, worldwide, 2007–2011
Figure 24: Number of Google Play-compatible device models1 by device manufacturer, worldwide, October 2012
Figure 25: Nokia handset shipments by type of handset, worldwide, 3Q 2012
Figure 26: Handset net additions by payment type, and smartphone penetration, Western Europe, 2006–2012
Figure 27: Smartphone net additions by payment type, Europe, 2009–2017
Figure 28: Reasons for not using mobile content and apps
Figure 29: Propensity to buy a smartphone of respondents who are not interested mobile content and apps
Figure 30: Minimum cost of owning an iPhone 5 16GB model over a 24-month contract, and corresponding service-related overhead, by operator, selected countries, October 2012
Figure 31: Handset users' preferences for subsidies and SIM-only offers when transferring from a non-smartphone to a smartphone
Figure 32: Distribution of monthly data traffic percentiles by smartphone operating system
Figure 33: Verizon Wireless's ‘Share Everything' subscription pricing, USA, July 2012
Figure 34: Advantages and disadvantages of different pricing strategies for 4G services
Figure 35: Share of Android OS versions and use of add-on apps among Android-user panellists, by handset vendor
Figure 36: The impact of a third OS on transitions between devices with different OSs
Figure 37: The future impact of device ecosystems on operators

- 3 Hong Kong
- Acer
- Alcatel Mobile Phones
- AT&T
- Apple
- ASUSTeK Computer
- Bouygues
- CSL 1010
- CSL one2free
- Coolpad
- Foxconn Electronics
- Fujitsu
- Google
- HTC
- Huawei
- Hutchison
- 3G UK
- Lenovo
- LG
- M1
- Micromax
- Microsoft
- Motorola
- NEC
- Netflix
- Nokia
- O2
- Optus
- Orange
- Panasonic
- Pantech
- Research In Motion (RIM)
- Samsung
- SFR
- Sharp
- SingTel
- Skype
- Sony
- Sony Mobile Communications
- Spotify
- Sprint
- StarHub
- T-Mobile
- TCL
- Telefónica Germany (O2)
- Telefónica UK (O2)
- Telstra
- Verizon Wireless
- Vodafone
- Vodafone Hutchison
- ZTE

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