Smartphones to account for two thirds of world’s mobile market by 2020 says new gsma intelligence study
Smartphone Connections to Reach Six Billion by 2020, Fuelled by Growth in the Developing World and Supported by Mobile Broadband Rollout
11 September 2014, London: Smartphones will account for two out of every three mobile connections globally by 2020, according to a major new report by GSMA Intelligence, the research arm of the GSMA. The new study, “Smartphone forecasts and assumptions, 2007-2020”, finds that smartphones account for one in three mobile connections[ii] today, representing more than two billion mobile connections. It forecasts that the number of smartphone connections[iii] will grow three-fold over the next six years, reaching six billion by 2020, accounting for two-thirds of the nine billion mobile connections by that time. Basic phones, feature phones and data terminals such as tablets, dongles and routers will account for the remaining connections. The study excludes M2M from the connections totals.
“The smartphone has sparked a wave of global innovation that has brought new services to millions and efficiencies to businesses of every type,” said Hyunmi Yang, Chief Strategy Officer at the GSMA. “As the study released today shows, smartphones will be the driving force of mobile industry growth over the next six years, with one billion new smartphone connections expected over the next 18 months alone.
“In the hands of consumers, these devices are improving living standards and changing lives, especially in developing markets, while contributing to growing economies by stimulating entrepreneurship. As the industry evolves, smartphones are becoming lifestyle hubs that are creating opportunities for mobile industry players in vertical markets such as financial services, healthcare, home automation and transport.”
Smartphone focus shifts to the developing world
The developing world overtook the developed world in terms of smartphone connections in 2011 and today accounts for two in every three smartphones on the planet, according to the new study. It is predicted that by 2020, four out of every five smartphone connections worldwide will come from the developing world.
Asia Pacific today accounts for about half of global smartphone connections, even though smartphone penetration in the region is currently calculated at below 40 per cent. The Asia Pacific total is boosted by the inclusion of China, the world’s largest smartphone market, with more than 629 million smartphone connections.
Top ten global smartphone markets, Q2 2014
Source: GSMA Intelligence
Smartphone connections (millions)
United States of America
In many developed markets, smartphone penetration is approaching the 70 to 80 per cent ‘ceiling’ at which growth tends to slow. According to the report, smartphone adoption is forecast to reach 75 per cent in Europe and North America by 2020. Smartphone growth in these two regions has slowed in recent years; smartphone connections grew by 35 per cent in North America and by 39 per cent in Europe between 2010 and 2013, compared to growth rates of over 80 per cent during the period in Asia Pacific and Latin America.
The top five countries worldwide with the highest smartphone adoption rates today (as a percentage of total connections) are Qatar, the UAE, Finland, South Korea and Norway. By contrast, Sub-Saharan Africa currently has the lowest smartphone adoption rate worldwide, at 15 per cent, but is expected to be the fastest-growing smartphone region over the next six years as affordable devices become more widely available and mobile broadband networks are deployed across Africa.
Factors driving the smartphone market
The new GSMA Intelligence report highlights a number of factors influencing growth in the global smartphone market, including:
· Rapid erosion of the Average Selling Price (ASP) of smartphones is accelerating user migration from basic and feature phones to smartphones
· Demand for low-end smartphones is driving volume growth, with sub-$50 smartphones becoming a reality
· Operator-branded smartphones sold via operator retail channels is a key trend driving the low-end segment
· Operator subsidies continue to play an important role in driving the adoption of high-end devices, but are being scaled back at lower price tiers
· The availability of 4G-LTE smartphones is influenced by the pace of allocation and assignment of 4G spectrum by regulators around the world
· The availability of ‘data-centric’ services and tariffs is fuelling the adoption of smartphones in both developed and developing economies
· In the developing world, smartphone adoption is linked to the availability of data tariffs tailored for cost-conscious prepaid consumers
· Smartphone growth is negatively impacted by taxation imposed on devices by governments, especially in price-sensitive developing economies
· In the developing world, there is a correlation between an increase in smartphone adoption and an increase in mobile broadband connections
The full report, “Smartphone forecasts and assumptions, 2007-2020”, is available to GSMA Intelligence subscribers and to accredited members of the press on request.
Click here to read more about this report on the GSMA blog: http://www.gsma.com/newsroom/smartphone/
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About the GSMA
The GSMA represents the interests of mobile operators worldwide. Spanning more than 220 countries, the GSMA unites nearly 800 of the world’s mobile operators with 250 companies in the broader mobile ecosystem, including handset and device makers, software companies, equipment providers and Internet companies, as well as organisations in industry sectors such as financial services, healthcare, media, transport and utilities. The GSMA also produces industry-leading events such as Mobile World Congress and Mobile Asia Expo.
For more information, please visit the GSMA corporate website at www.gsma.com.
[ii] A mobile connection is defined as a unique SIM card (or a phone number where SIM cards are not used) registered on a mobile network. It is not the same as a mobile unique subscriber which refers to an individual who can have multiple mobile connections. Machine-to-machine connections are excluded from this study.