Annual smartphone shipments to Asia are expected to more than quadruple between now and 2015, giving Asia 39% of smartphone shipments during 2015. Overall shipments of smartphones are forecast to increase at a compound annual growth rate of 25.9% between now and 2015. This trend illustrates the increasing development of cellular markets in Asia and foreshadows the importance of the region for the future, according to IMS Research.
IMS Research analyst Chris Schreck said, "There are two key drivers for the booming Asia smartphone market. First, the cellular markets in China and India continue to develop, especially with 3G networks expanding in China and expected to rollout soon in India. The populations of these countries are significant enough to drive substantial smartphone growth, even if smartphones make up a relatively small portion of the country's total handset shipments. Secondly, smartphones are becoming increasingly affordable. As the minimum hardware components required to support smartphone features continues to decline in price, smartphones have become mass market devices, rather than luxury purchases."
While the growth of the Asia smartphone market offers a sizable opportunity, it also offers challenges for many traditional players in the smartphone space. "It would be unwise to expect the smartphone market to develop along the same lines as it did in Europe or North America," Schreck continued. "Companies like Motorola, who had to change the default search provider from Google to Microsoft on its Android smartphones in China, or Apple, whose iPhone sales in Japan lagged without the inclusion of NFC, have shown the need to adapt products to compete in these markets. Additionally, there is increasing competition from Asia-based handset vendors like Huawei, ZTE, HTC, and Acer in the Asia smartphone space. Finally, the grey market for mobile handsets is much more established in Asia than in western markets, giving consumers viable alternatives to more conventional handset purchasing methods. These challenges are opening up a booming smartphone market to players who have had trouble competing with entrenched competitors in developed western markets."
As mentioned earlier, one of the enablers of smartphone growth in Asia has been the diversification of smartphone designs. IMS Research defines smartphones as mobile handsets that utilize an "open architecture operating system" and expects that a majority of smartphone shipments to Asia will be "entry-level smartphones," featuring an ASP under US$120 before subsidies or taxes.
