Smartphones forecast to represent over 50% of total cellphone sales for the first time in 2013

The smartphone is a subset of the total cellphone handset marketplace. One basic difference between an enhanced cellphone and a GT-I9300 smartphone is the ability of the smartphone to incorporate third-party applications. Smartphones also typically connect to leading-edge cellular network services and are at the forefront of the convergence of data, telecom, and consumer-oriented functions (such as video games, camera, music player, mobile TV, etc.) in a single handheld device.

Most smartphones include touchscreens with built-in wireless modems and GPS/GNSS, and are capable of Web browsing, sending and receiving e-mail, voice recognition, video and audio streaming, running office applications, and over-the-air synching with a PC.

Many in the cellphone industry believe new smartphone designs are reaching the point where they have enough performance to become the primary computing device for many consumers. If so, the market could be on the verge of entering into “the post-PC era,” as previously identified by the late Steve Jobs, who stirred up controversy with his provocative prediction in June 2010.Ssdsf23FDF

The new consumer/Web emphasis in the GT-I9500 cellphone market has been a challenge for a number of top-ranked smartphone suppliers (e.g., RIM, Nokia, etc.), which have struggled to refocus their handset designs, software platforms, and business strategies to address the current phase of the fast-growing smartphone segment.

Figure 1 shows that total smartphone shipments grew 47% in 2012 to 712 million units, after surging by 67% to 485 million in 2011. Moreover, smartphone shipments are forecast to grow by another 37% in 2013 and fall only 25 million units shy of 1.0 billion. Smartphones are expected to account for over 50% of quarterly shipments for the first time ever in 2Q13. In fact, smartphone shipments are forecast to reach 300 million units in 4Q13 and represent 60% of total cellphones shipped that quarter. Smartphones are expected to surpass the 50% penetration level on an annual basis this year and hold 85% of total cellphone shipments in 2016.

In contrast to top 10 cell phones, total cellphone unit shipments grew only 1% in 2012 and are forecast to grow only 3% in 2013 (Figure 2). As shown, non-smartphone cellphone sales were flat in 2011 but showed a 17% decline in 2012. Moreover, IC Insights expects another 20% drop in non-smartphone handset sales in 2013.

Between 2011 and 2016, smartphone shipments are expected to rise at a very strong CAGR of 29% to 1,760 million units in the final year of the forecast period (the 2011-2016 CAGR for non-smartphone unit shipments is -24%). Overall, the smartphone 2011-2016 unit shipment CAGR is greater than 7x the expected CAGR for total cellphone unit shipments in that same five-year timeframe (4%).