Worldwide Mobile Phone Market Grew 20% In Q1 2011, Fueled By Smartphone Boom
According to research firm IDC, the global mobile phone market ballooned in the first quarter of this year, growing 19.8 percent year-over-year, mostly due to the meteoric rise of smartphone shipments, especially in emerging markets.
Context & Ripple Effects
This is confirmation that the acceleration Gartner measured last fall was no blip: Gartner's Q3 2010 tally of 35 percent overall phone growth and 96 percent smartphone growth has now been followed by IDC's reading of 19.8 percent year-over-year growth for Q1 2011, with smartphone shipments again doing the lifting. Two independent trackers pointing the same direction within two quarters makes this a durable shift rather than a holiday-quarter artifact.
What has changed since those earlier numbers is where the growth comes from — IDC attributes this quarter's gains especially to emerging markets, which means the expansion is now driven by first-time buyers moving into smartphones, not just upgrades in saturated Western markets. It also extends the crossover IDC reported in February, when smartphones outsold PCs in Q4 shipments for the first time.
First-order effects
- Vendors weighted toward smartphones capture the growth while feature-phone-first makers see their addressable base shrink, forcing portfolio decisions on every major handset maker this year.
- Emerging-market demand resets the product target: the winning devices at the margin are affordable smartphones, so pricing and bill-of-materials pressure concentrates at the low end.
Second-order effects
- Component suppliers — application processors, displays, memory — see volumes shift from feature-phone parts to smartphone silicon, tightening supply and repricing the component mix across the industry.
- Operators in newly connected markets face a surge in data traffic from first-time smartphone users, pulling network buildout and data-plan design ahead of what voice-era infrastructure assumed.
Third-order effects
- With smartphones already outshipping PCs and total phone growth running near 20 percent a year, the pocket device is becoming the default personal computer for hundreds of millions of buyers who never owned one — restructuring where software attention, developer effort (as Appcelerator's joint surveys with IDC already track) and ultimately ad and commerce spend flow.
- If emerging-market adoption keeps compounding, the industry's center of gravity moves decisively toward low-cost hardware ecosystems, setting up share battles among Android licensees and anyone else competing at that price point.
The trend: The global phone market's growth engine has shifted from mature-market upgrades to first-time smartphone buyers in emerging markets, turning the mobile handset into the world's dominant computing platform.