The future of mobile devices is bright. And, increasingly, that future, or at least the part of it that will grow most quickly, is outside of North America and Western Europe.
Are Smartphone Owners Switching Teams?
Earlier this week, I posted about BlackBerry’s poor first quarter numbers. Fortune offers a telling paragraph in terms of where the market is heading:
The broader issue facing BlackBerry, however, is one that faces Apple, Samsung and other manufacturers. The high-end of the smartphone market, which BlackBerry 10 is aimed at, has become saturated. Most of the sales are for lower-priced devices, which explains why the majority of BlackBerry shipments were in older models. The problem is, those cheaper phones mean less profit margin for manufacturers.
Granted, that paragraph doesn’t indicate that the business focus is moving to developing countries. But it is a logical assumption that a significant portion of the low-end market to which Kevin Kelleher refers is outside North America and Western Europe.
There is more direct evidence of the greater concentration on less developed markets. For instance, Samsung was reported by The Hindu Business Line to be set to invest $83 million expanding its Indian production.
Mobile strength in non-western markets also is evident halfway around the world. According to IDC, tablet sales in Brazil are on a path to surpass those of PCs. The firm predicts that 5.8 million tablets will be sold there this year, a number that will outdistance expected PC sales by 300,000. The ZDNet story on the IDC findings describes a vibrant market featuring both local and international manufacturers. The locals include CCE and Positvo and use the Android operating system. The multinationals include Apple, which launched the iPad Mini in Brazil last month, Huawei, Qualcomm and others.
The transition in India, Brazil and elsewhere was noted in research released this week by ABI Research. The firm said that China will move ahead of the United States and become the largest smartphone market in the world, with Brazil and India rounding out the top four. Long-term trending will increase the focus on Brazil, Russia, India and China (the BRIC countries):
ABI Research forecasts that the top five countries in 2018 will account for 51% of worldwide smartphone shipments while the BRIC countries will account for 33% of smartphone shipments. By 2018, Western Europe and North Americas’ share of smartphone shipments will be 33% (equal to BRIC) down from 39% in 2013. It is clear that the growth of the smartphone market over the next five years will depend on operators and handset OEMs delivering optimized and price appropriate solutions to the BRIC consumers.
This trend has several causes: The demand for higher-end phones in the developed world is fading and replacement markets are needed. At the same time, the flexible and inexpensive Android operating system can provide a good deal of functionality at a low cost.
At a higher level, the increasingly interconnected and interdependent nature of the world economy drives demand for advanced telecommunications, even in under-developed countries. These nations lack strong wireline infrastructures, so the fast emergence of a strong mobile sector is likely.
