(The following is a reformatted version of a press release
issued by IHS and received via e-mail. The release was confirmed
by the sender.) 
Cornucopia of Choices Spurs Smartphone Market to Double by End
of 2017 
El Segundo, Calif. (July 17, 2013)--With most of the top brands
introducing new flagship models in the first half of 2013,
smartphone buyers now have more choices than ever, a phenomenon
that will contribute to an expected doubling in market shipments
from 2012 to 2017. 
Worldwide smartphone shipments will reach 1.5 billion units in
2017, up from 712 million in 2012, according to a new Mobile &
Wireless Communications Report from information and analytics
provider IHS Inc. Shipments this year are set to rise to 897
million units, up from 712 million in 2012. 
In the years that follow, shipments of smartphones will expand
at a compound annual growth rate (CAGR) of 15.8 percent,
reaching 1.1 billion units in 2014, followed by 1.2 billion in
2015, and 1.4 billion in 2016. 
“The volume of new flagship smartphone releases from top
original equipment manufacturers (OEM) this year has been
astounding,” said Wayne Lam, senior analyst for consumer and
communications at IHS. “These include the new BlackBerry Z10,
the aluminum uni-body HTC One, and an update to the Samsung
Galaxy S4 featuring a Full HD 5-inch active matrix organic light
emitting diode (AMOLED) display.” 
On the other hand, Apple’s iPhone franchise appears to be
stalling as first-quarter shipments of 37.4 million fell below
expectations. With the next iPhone model not expected until the
second half of the year, there is a real possibility that the
full-year 2013 sales volume of the iPhone may be essentially
flat at around 150 million units, compared to 134 million units
in 2012. 
“The possible slowing growth of the iPhone and the rapid pace of
competitive smartphones releases speak to the ferocious nature
of the handset business, especially now as the market continues
to pivot from a market dominated by lower-end handsets known as
feature phones to one that is increasingly smartphone-centric,”
Lam said. 
The trend of deeper smartphone penetration continued in the
fourth quarter of 2012 and the first quarter this year, as
smartphones outshipped feature phones in the overall branded
cellphone market. 
After a seasonally high fourth quarter, which saw total mobile
handset shipments topping 400 million units for the first time,
handset shipments in the first quarter of 2013 contracted by
nearly 50 million units quarter-over-quarter, keeping with
seasonal sales trends. 
Samsung continued its strong growth in the first quarter with a
sequential increase of 9 million units, while  brands such as
Coolpad and Gionee outshipping the likes of HTC and Motorola in
the first quarter. 
Chinese smartphone OEMs were able to accomplish such growth on
the back of a catalog of largely affordable smartphones, while
Samsung rolled out a number of low-cost variants to its high-end
flagship products. 
These competitive forces, as well as changing consumer demand,
will place pressures not only on Apple but also on other OEMs,
IHS believes, forcing players to innovate and diversify
smartphone offerings in order to continue growing. 
Just innovate 
Innovation in smartphone design is becoming a necessity for OEMs
as consumers demand more immersive user experiences and visual
content. Many smartphones, for instance, are moving to 5-inch or
larger full HD displays to accommodate consumer desire for these
In parallel with an expanded display, the overall footprint of
smartphones is likewise increasing because of larger batteries,
which will then allow for more powerful processors, associated
memory and sensors. 
But these expanded features come at a cost to OEMs, driving up
the dollar content of electronics and pushing the bill- of-materials (BOM) cost for the devices. Still, as variations in
smartphone designs increase, opportunities to win design slots
multiply as well for component suppliers--developments that bode
well for the overall smartphone supply chain. 
For more information, please contact: 
Jonathan Cassell
Senior Manager, Editorial
Direct: + 1 408 654 1714
Mobile: + 408 921 3754 
IHS Media Relations
+1 303 305 8021 
(sgp) NY 
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