Global smartphone shipments increased in 2012 by 43% over the previous year, accounting for 653 million of the 1.6 billion mobile phone shipped. This figure is a large decrease from the rate of smartphone shipment growth in 2011, which was 64%.
|You can buy seven of these for the price of one Samsung Galaxy S III or Apple iPhone 5|
The main reason for this is overall though the mobile phone market is flat. Total mobile phones shipments in 2012 being only 2% higher than 2011. Basically, the market for mobile phones in general is not growing substantially, and increase in the sales of smartphones centers more and more on convincing feature phone owners to move to smartphones. Basically, you are looking at 900+ million sized market, mainly consisting of prepaid subscribers, looking to buy mobile phones priced at less than US$100 unsubsidized.
In this type of market you will see the second and third tier manufacturers grow substantially in terms of market share with their low cost offerings. Notably, Huawei which combines a long history of telecommunications know how and low or lower cost handsets. Huawei increased it sales year-on-year in the 4th quarter of 2012 to become the third largest smartphone manufacturer in the world. Another second tier smartphone manufacturer with a long history in the telecommunications business, ZTE sits in 5th place.
Even with conservative estimates, smartphone shipments will reach more than 1 billion handsets in than two years, but in order for a manufacturer to get it smartphone into users hands they will have to build cheaper smartphones. Outside of the big manufacturers, there are plenty of smaller ODM manufacturers whose phones are marketed in different names and in different countries. For the big boys, like Samsung, Apple, Huawei, Sony, ZTE, HTC and LG, their future is dependent on maintaining buyer loyalty and switchers from existing smartphone owners.