Smartphone Shipments will Eclipse all other Handset Shipments Combined by 2016

Global handset shipments will increase 29% from 1.7 billion in 2012 to 2.2 billion in 2016. The key driver of this growth will come from the smartphone segment, which is forecast to become larger than the ultra-low cost, low-cost, and feature phone segments combined by 2016. The total shipments of non-smartphones will grow 1.08 billion in 2012 to 1.09 billion in 2016 while smartphone shipments will grow from 643 million to 1.1 billion over the same period.

OEMs that have had historic success addressing the low-cost handset segments will be under tremendous pressure to shift their portfolio to smartphones. Considering that they currently serve consumers with low disposable incomes, these OEMs will need to deliver smartphones that are price competitive to low-cost handsets. “This emerging scenario could become a very dangerous situation for Nokia’s handset business as the smartphone and feature phone segments will not be able to support each other in trying times,” says Kevin Burden, vice president and practice director, mobile devices.

Low-cost OEMs that are shifting to smartphones, such as Huawei and ZTE, will be a key driving factor for the growth and innovation in the sub-$150 smartphone segment. Low-cost smartphones are forecast to grow from 45 million shipments in 2012 to 170 million in 2016. “The writing is on the wall: either you have a successful smartphone strategy or you will have to steal market share to grow,” says Michael Morgan, senior analyst, mobile devices.

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