Emerging Markets Lead Smartphone Growth Q1 2015

Details: Alec Barton; Category: Trends & Forecasts; 19 May 2015; 8161 views

Emerging APAC markets, along with Africa and the Middle East are currently the world's fastest growing smartphone markets.

Meanwhile while data traffic generated by smartphones, featurephones and tablets in Asia exceeded that of North America for the first time during 2014.

With growth of 30% in the number of smartphones sold during Q1 2015, as compared with the same period a year earlier, emerging APAC, Africa and the Middle East have left North America (17%) and Europe (12%) trailing. Latin America, with 22% growth in unit sales, shared the top spots.

By value Africa and the Middle East were global leaders with a 20% year-on year increase. Growth in emerging APAC markets was in sharp contrast to China and developed APAC (Australia, New Zealand, Hong Kong, Taiwan Japan, South Korea and Singapore), where sales volumes were flat or, in the case of China, went into reverse.

Market analyst GfK, which undertook the research, suggest a number of reasons for the contrast in fortunes between developed and emerging markets. "The weakness in China was caused by a significant slowdown in 3G demand, which was not offset by 4G growth. We forecast China to return to growth in the second half of the year, driven by a continued 4G ramp-up." commented Kevin Walsh, director of trends and forecasting at German based GfK. He continues "We forecast unit demand in Developed Asia to grow by +3 percent year-on-year in 2015, driven by Japan and South Korea, which are expected to return to growth in Q2 2015."

In Western Europe GfK forecasts an overall decline in sales in 2015 as smartphone penetration nears saturation point. In Central and Eastern Europe, the macroeconomic situation in Russia has significantly impacted sales and as a result GfK forecasts that 2015 smartphone demand in the region will grow more slowly than Western Europe for the first time since 2010.

Low-end smartphones - those priced in the region of $0-250 - increased share to 56 percent, up from 52 percent in Q4 2014, at the expense of the high-end models ($500+), whilst mid-range ($250-500) share remained stable. GfK forecasts low-end smartphones to gain further share in 2015, helped by continued price erosion in emerging markets.

Data Drives 4G Growth in Emerging Markets

Juniper Research, meanwhile, report that data traffic generated by smartphones, featurephones and tablets in Asia has overtaken that of North America for the first time during 2014. The research also confirms that a significant gap exists between the level of data traffic offloaded to WiFi in emerging markets and developed markets.

In Europe and North America as much as 60% of data is carried over WiFi whereas in emerging markets the figure is lower, which will continue to fuel the growth of 4G in emerging markets.

This is reflected in 4G smartphone sales growth. China saw the greatest 4G share increase in Q1 2015, up 16 points to 73%, from 57% last quarter. Smartphone growth in India and Indonesia is also expected to be helped by an expanding 4G network. In Q1 2015, 4G share in both countries was well below the global average, at 4% and 7% respectively. GfK forecasts 4G unit share within smartphones to reach 7% in India and 10% in Indonesia in 2015.

Globally in Q1 2015, 4G unit share surpassed 50% of global smartphone demand for the first time. Growth has been buoyed by the continued price erosion of 4G smartphones. GfK forecasts global 4G share to increase further in 2015, reaching 59% in Q4 2015.