Emerging markets are expected to greatly contribute to the continued growth of smartphones, tablets and PCs over the next few years. Research firm IDC projects shipments of “smart connect devices” will grow to 1.7 billion units in 2014, roughly 1 billion of which will be shipped to emerging markets. China, India, Brazil, and Russia are expected to generate shipments of 662 million units valued at more than $206 billion, while the United States, the United Kingdom and Japan will account for more than 650 million units valued at $204 billion. Tablets and smartphones are expected to make up a bulk of the shipments, accounting for more than 1.4 billion units worth around $500 billion. The PC industry will likely continue to suffer, only seeing shipments of 300 million units valued at less than $200 billion.
“It is evident that smartphones and tablets have successfully established a strong presence as the ‘second screen’, owing to the transformation in usage patterns, device affordability, and, most of all, the comfort of a mobile and digital lifestyle,” said IDC analyst Megha Saini. “Vendors and OEMs need to be aware of the different usage patterns so as to drive product innovation that suits the tangible needs of their digital consumers.”
The popularity of smartphones and tablets has made it easier and cheaper for more consumers to buy them. The average selling price of tablets plummeted 19% from $525 in 2011 to $426 in 2012, while smartphone prices fell 8.2% year-over-year from $443 to $407. Prices are even lower in emerging markets, however. IDC predicts that sub-$300 smartphones and sub-$350 tablets will increase shipments greatly in 2014 and for years to come.
“Smartphone and tablet prices are now less prohibitive to first-time buyers in emerging markets,” said analyst Bob O’Donnell. “Although the double-digit growth of smartphones and tablets in emerging countries is a mouth-watering prospect, the low selling price also means that vendors will face huge struggles to meet the demands profitably. Given the competitive price points for cheaper smartphones and tablets, this price war is a race to the bottom and it’s not at all clear that this low-end market offers sustainable profits to smartphone and tablet vendors.”