Smartphones Expected to Outship Feature Phones for First Time in 2013, According to IDC

  Smartphones Expected to Outship Feature Phones for First Time in 2013,
  According to IDC

Business Wire

FRAMINGHAM, Mass. -- March 4, 2013

More smartphones are forecast to be shipped globally than feature phones in
2013, the first such occurrence in the mobile phone market on an annual basis.
According to the International Data Corporation (IDC) Worldwide Quarterly
Mobile Phone Tracker, vendors will ship 918.6 million smartphones this year,
or 50.1% of the total mobile phone shipments worldwide.

Smartphone prices have fallen globally, the smartphone strata are wider than
ever, and the roll-out of data-centric fourth-generation (4G) wireless
networks are three factors that have made these "do-it-all" devices an
increasingly attractive option for users. By the end of 2017, IDC forecasts
1.5 billion smartphones will be shipped worldwide, which equates to just over
two-thirds of the total mobile phone forecast for the year due to these
primary factors.

To date, much of the world's smartphone shipments were a direct result of
demand in mature economies such as the U.S. The balance of smartphone demand
is gradually shifting, however, to emerging markets where smartphone user
bases are still relatively small and economic prospects are considerably
higher. Smartphone shipments to China, Brazil, and India will comprise a
growing percentage of the device type's volume in each forecast year.
Smartphone demand is burgeoning in these large, populous nations as their
respective economies have grown; this has made for a larger middle class that
is prepared to buy smartphones. China, which supplanted the U.S. last year as
the global leader in smartphone shipments, is at the forefront of this shift.

"While we don't expect China's smartphone growth to maintain the pace of a
runaway train as it has over the last two years, there continue to be big
drivers to keep the market growing as it leads the way to ever-lower
smartphone prices and the country's transition to 4G networks is only just
beginning," said Melissa Chau, Senior Research Manager, IDC Asia/Pacific.
"Even as China starts to mature, there remains enormous untapped potential in
other emerging markets like India, where we expect less than half of all
phones shipped there to be smartphones by 2017, and yet it will weigh in as
the world's third largest market."

Brazil is another market where smartphone growth will remain high over the
course of the forecast as its economic fortunes improve. "Brazilians have yet
to turn in their feature phones for smartphones on a wholesale basis," said
Bruno Freitas, Consumer Devices Research Manager, IDC Brazil. "The smartphone
tide is turning in Brazil though, as wireless service providers and the
government have laid the groundwork for a strong smartphone foundation that
mobile phone manufacturers can build upon."

Top Five Markets for Smartphone Shipments

China will easily remain the world's largest market for smartphones,
specifically low-cost handsets based on the Android operating system and to a
lesser degree iOS. While shipment volume to the country will remain at the
top, growth will slow towards the end of the forecast period. Also, smartphone
prices are expected to fall amid increased competition. Consequently, China's
share of the global smartphone market will be diluted somewhat as more
smartphones are shipped to India, Brazil, and other emerging markets.

Now that smartphone users constitute the majority of all mobile phone users in
the United States, IDC expects slower growth in the years ahead. Underpinning
its growth is the constantly shifting operating system landscape, in which
resurgent BlackBerry and Windows Phone aim to gain salience against incumbents
Android and Apple iOS.

India's year-over-year smartphone shipment growth  will be the highest among
the top countries by a wide margin as the vast majority of the country's
wireless subscriber base currently use feature phones. The smartphone market
will grow due to a variety of factors including greater availability of
low-cost devices and additional sales emphasis by top-flight vendors on less
populous parts of the country. In addition, 3G network coverage will continue
to expand while 4G networks are expected to stimulate smartphone growth from
2015 onwards.

Brazil's smartphone market rise is driven by a confluence of circumstances,
such as tax breaks for vendors that create jobs via local mobile phone
production. Wireless service providers are offering greater subsidies to drive
smartphone sales with an eye on higher data revenue streams in the future. The
successful rollout of Long-Term Evolution (LTE) networks in Brazil is key to
the country's smartphone market growth.

Growth of the United Kingdom smartphone market has slowed considerably in
recent quarters as penetration has risen and economic growth remains minimal
at best, which has led to consumer trepidation. The size of the market and its
wealth relative to much of Western Europe will make it a smartphone volume
leader over the forecast given the ongoing transition to LTE networks and
continued high carrier subsidies.

                                                          
Top Five Countries Smartphone Shipments and Market Share, 2013 and 2017 (Units
in Millions)
                                                                     
                 2013 Unit     2013        2017 Unit     2017        2017/2013
Country*         Shipments     Market      Shipments     Market      Growth
                               Share                     Share
1. China         301.2         32.8%       457.9         30.2%       52.0%
2. USA           137.5         15.0%       183.0         12.1%       33.1%
3. United        35.5          3.9%        47.5          3.1%        33.8%
Kingdom
4. Japan         35.2          3.8%        37.7          2.5%        7.1%
5. Brazil        28.9          3.1%        66.3          4.4%        129.4%
6. India         27.8          3.0%        155.6         10.3%       459.7%
Others           352.5         38.4%       568.1         37.5%       61.2%
Total            918.6         100.0%      1516.1        100.0%      65.0%

Source: IDC Worldwide Mobile Phone Tracker, March 4, 2013

* Note: Countries are listed by 2013 rank, based on unit shipments. The 2017
ranking is forecast to be 1. China, 2. USA, 3. India, 4. Brazil, 5. United
Kingdom, 6. Japan.

In addition to the table above, a graphic showing the relative share of
smartphone and feature phone shipments over the 2012-2017 forecast period is
available at IDC.com. The chart is intended for public use in online news
articles and social media. Instructions on how to embed this graphic can be
found by viewing this press release on IDC.com.

For more information about IDC's Worldwide Quarterly Mobile Phone Tracker,
please contact Kathy Nagamine at 650-350-6423 or knagamine@idc.com.

About IDC Trackers

IDC Tracker products provide accurate and timely market size, vendor share,
and forecasts for hundreds of technology markets from more than 100 countries
around the globe. Using proprietary tools and research processes, IDC's
Trackers are updated on a semiannual, quarterly, and monthly basis. Tracker
results are delivered to clients in user-friendly excel deliverables and
on-line query tools. The IDC Tracker Charts app, available at iTunes, allows
users to view data charts from the most recent IDC Tracker products on their
iPhone and iPad.

About IDC

International Data Corporation (IDC) is the premier global provider of market
intelligence, advisory services, and events for the information technology,
telecommunications, and consumer technology markets. IDC helps IT
professionals, business executives, and the investment community to make
fact-based decisions on technology purchases and business strategy. More than
1,000 IDC analysts provide global, regional, and local expertise on technology
and industry opportunities and trends in over 110 countries worldwide. For
more than 49 years, IDC has provided strategic insights to help our clients
achieve their key business objectives. IDC is a subsidiary of IDG, the world's
leading technology media, research, and events company. You can learn more
about IDC by visiting www.idc.com.

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krestivo@idc.com
or
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or
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