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.
The new consumer/Web emphasis in the 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 smartphones, 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%).
Competition in smartphones intensified in 2012 as suppliers rolled out new handset designs with larger touch-screen displays, more powerful processors, better operating systems, higher-resolution cameras, and new radio-modem connections to the faster “4G” cellular networks, which were quickly spreading in the U.S., South Korea, Europe, and Japan. In the next few years, new high-speed “4G” networks are planned for China, India, Brazil, the Middle East, and other fast-growing developing markets.
Samsung and Apple dominated the smartphone market in 2012 and are expected to do so again in 2013. In total, these two companies shipped 354 million smartphones (218 million for Samsung and 136 million for Apple) and held a combined 50% share of the total smartphone market last year. For 2013, these two companies are forecast to ship 480 million smartphones (300 million for Samsung and 180 million for Apple) and see their combined smartphone unit marketshare slip only one percentage point to 49%.
In 2012, smartphone sales from China-based ZTE, Lenovo, and Huawei surged. Combined, the three top-10 China-based smartphone suppliers shipped about 80 million smartphones in 2012, more than a 3x increase from the 24 million smartphones these three companies shipped in 2011. Moreover, these three companies are forecast to ship 142 million smartphones in 2013 and together hold a 15% share of the worldwide smartphone market. In contrast to the success of the large China-based smartphone suppliers, IC Insights expects RIM and HTC to continue to struggle in the smartphone marketplace in 2013 with both companies forecast to show a double-digit decline in smartphone unit shipments as compared to 2012.
Smartphone suppliers under pressure include Nokia, RIM, and HTC, each of which registered steep double-digit year-over-year declines in smartphone sales in 2012. Until several years ago, Nokia held a 50% marketshare in smartphones, but in 2008 and 2009, the company saw its share fall below 40% due to increased competition from suppliers targeting consumers with interactive touch-screen handsets that are capable of running multimedia applications. In 2012, Nokia’s smartphone shipments declined by 55% (to only 35 million units) and represented only a 5% share of the total smartphone market. Other smartphone producers that have fallen on hard times recently include RIM and HTC. While each of these companies had about a 10% share of the 2011 smartphone market, IC Insights forecasts that each of them will have only about a 3% share of the 2013 smartphone market.
Report Details: IC Market Drivers 2013
IC Market Drivers 2013—A Study of Emerging and Major End-Use Applications Fueling Demand for Integrated Circuits examines the largest, existing system opportunities for ICs and evaluates the potential for new applications that are expected to help fuel the market for ICs.
IC Market Drivers is divided into two parts. Part 1 provides a detailed forecast of the IC industry by system type, by region, and by IC product type through 2016. In Part 2, the IC Market Drivers report examines and evaluates key existing and emerging end-use applications that will support and propel the IC industry through 2016. Some of these applications include the automotive market, cellular phones (including smartphones), personal/mobile computing (including tablets and Ultrabooks), wireless networks, digital imaging, and a review of many applications to watch—those that may potentially provide significant opportunity for IC suppliers later this decade. The 2013 IC Market Drivers report is priced at $3,190 for an individual-user license and $6,290 for a multi-user corporate license.