Smartphone and Tablet shipments to reach 1.7 billion by 2014

Debt warning over smartphones

Market research analyst IDC has produced a report, which suggests that global shipments of smartphones and Tablets will reach 1.7 billion by 2014.

IDC suggest that around 60% of the market share for these devices won't be to the usual dominant markets of the US and Western Europe, but will instead be heading to the emerging markets in Brazil, Russia, India and China.

Together, the so called BRIC countries will expect to see some 662 million devices shipped, whilst the more mature Western markets will still see around 400 million units.

The developing markets in these countries are seen as a strong source of growth for manufacturers, with large percentages of mobile users still using feature phone devices. As more and more users move to smartphones, the average price of devices is also falling, making smartphone ownership more affordable. Smartphone prices have decreased in the last year on average by 8 percent, whilst the price of Tablets has fallen by an average of 19 percent.

“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 Megha Saini, Analyst with IDC. “Vendors and OEM's need to be aware of the different usage patterns so as to drive product innovation that suits the tangible needs of their digital customers.”

The emergence of low price smartphones and Tablets is expected to drive the uptake of connected devices, with smartphones under $300 and Tablets coming in at under $250.

Although shipments in to Western markets will be fewer, the revenue earned will be around the same, as users within these areas tend to pay more for their handsets, which have a higher markup.

“Smartphone and Tablet prices are now less prohibitive to first time buyers in emerging markets,” said 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 is not at all clear that this low end market offers sustainable profits to smartphone and Tablet vendors.”