Smartphones to account for two-thirds of world’s mobile market by 2020: GSMA

  • Smartphone connections to reach six billion by 2020
  • Fuelled by developing world, supported by mobile broadband
Smartphones to account for two-thirds of world’s mobile market by 2020: GSMA

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 GSM Association.
The new study, Smartphone forecasts and assumptions, 2007-2020, finds that smartphones account for one in three mobile connections today, representing more than two billion mobile connections, the GSMA said in a statement.
It defines a mobile connection 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 were excluded from this study.
The study forecasts that the number of smartphone connections 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 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 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,” Yang added.
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, GSMA said.
Asia Pacific today accounts for about half of global smartphone connections, even though smartphone penetration in the region is currently calculated at below 40%. The Asia Pacific total is boosted by the inclusion of China, the world’s largest smartphone market, with more than 629 million smartphone connections.
The world’s fifth biggest smartphone market in 2014 is Indonesia, with 95 million connections.
In many developed markets, smartphone penetration is approaching the 70% to 80% ‘ceiling’ at which growth tends to slow.
According to the report, smartphone adoption is forecast to reach 75% in Europe and North America by 2020. Smartphone growth in these two regions has slowed in recent years; connections grew by 35% in North America and by 39% in Europe between 2010 and 2013, compared with growth rates of over 80% 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 United Arab Emirates, Finland, South Korea and Norway.
By contrast, Sub-Saharan Africa currently has the lowest smartphone adoption rate worldwide, at 15%, 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.
Smartphone market drivers

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-US$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 (Fourth Generation/ Long-Term Evolution) 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; and
  • In the developing world, there is a correlation between an increase in smartphone adoption and an increase in mobile broadband connections

Related Stories:
Smartphone subsidies and telco profitability
2013: The year smartphone sales overtook the rest, says Gartner
APAC smartphone sales up 74%, Microsoft takes No 3 spot globally
For more technology news and the latest updates, follow us on TwitterLinkedIn or Like us on Facebook.

Keyword(s) :
Author Name :
Download Digerati50 2020-2021 PDF

Digerati50 2020-2021

Get and download a digital copy of Digerati50 2020-2021