Looking for the bigger, better deal is a fairly universal part of life these days. We all want to get the most for our collective buck, and when it comes to smartphones, that's no exception. A new study from Ovum shows just how far the bargain hunter mentality is going in the smartphone market, and shows that there will be quite a brisk market for smartphones coming in at under $100.
The Ovum study, from the Mobile Handsets Interactive Forecast Tool: 2013-20, offered up one major point: by 2020, nearly half—40 percent—of all smartphones sold worldwide would be smartphones valued at under $100. Much of these would be Android devices with 80 percent of the market share by volume said to go Android's way. Apple's projected share of the market, meanwhile, will be 14 percent, while much of what's left at 4.2 percent would go to Microsoft's Windows Phone devices.
That wasn't all the study had to offer; the forecast suggests that total handset sales will go from 1.88 billion in 2014 to a hefty 2.16 billion units by 2020, with a compound annual growth rate (CAGR) of 2.4 percent. Ninety-five percent of those devices would be smartphones by the 2020 mark, and 2020 would be the year that sees two billion unit sales.
Growth in the market would actually be led by Africa and the Middle East, as well as Latin America. The regions would see a CAGR of 17 percent and 11 percent, respectively, and the region itself would account for 576 million units sold by 2020. That's a huge jump from 2014 figures for the region at 254 million total. Meanwhile, reports note that the Chinese market is approaching the saturation point, looking at a CAGR of just 4.1 percent. Growth is growth, some might say, but compared to the expected CAGR for India at 19.7 percent and 16.3 percent for Indonesia, it's easy to call Chinese growth lackluster. But even that isn't as low as the established Western European and North American markets; Western Europe's expected CAGR matches North America's at two percent.
Ovum's consumer technology practice's lead analyst, Ronan de Renesse, offered up some comment around the study, saying “Smartphones are leading the path to digital transformation and therefore have yet to unlock massive opportunities in many markets. The fact that almost all handsets to be sold in 2020 will be smartphones will lead to great socioeconomic achievements across the world in the next five years.”
A strange new market is setting itself up here, one where most of the market has a smartphone, but not necessarily a high-end one. Advertising using video as its base may not work so well here, but then, there may be a significant opportunity for using things like quick response (QR) codes that require a smartphone's photographic and Web-access capabilities, but not necessarily much more than that. The market is heavily Android, but we've already seen how iOS users spend more while on devices in research going as far back as 2014.
What's clear here is that the market is changing, and companies are going to have to revisit marketing and development plans alike in the face of a market where most of the phones are smartphones, and most of these are Android as well. Change is the market's one great constant, and we're seeing that much right here.
Edited by
Dominick Sorrentino