Android peaks as phone market slows
July 06, 2012
Mobile Internet Supplement
This year is set to be a banner year for Android, but not for the mobile phone market overall as a slump in the feature-phone market limits growth to single digits.
According to the latest Worldwide Quarterly Mobile Phone Tracker report from research firm IDC, vendors will ship a total of nearly 1.8 billion mobile phones this year, compared to 1.7 billion units shipped in 2011. That’s a mere 4% growth year on year, and the lowest annual growth rate for the mobile handset sector in three years.
IDC credits the expected slowdown to a projected 10% decline in feature phone shipments in 2012. While feature phones will still comprise 61.6% of the total mobile phone market this year, many feature phone owners are holding on to their phones in light of uncertain job and economic prospects, IDC says.
On the bright side, the smartphone segment will offset the feature-phone slump with a 38.8% increase to 686 million units, driven by high carrier subsidies, falling average selling prices and component costs, increased awareness and device diversity, and lower-cost data plans among other things.
“The smartphone parade won’t be as lively this year as it has been in past,” said Kevin Restivo, senior research analyst with IDC’s Worldwide Quarterly Mobile Phone Tracker. “The mobile phone user transition from feature phones to smartphones will continue in a gradual but unabated fashion. Smartphone growth, however, will increasingly be driven by a triumvirate of smartphone operating systems, namely Android, iOS and Windows Phone 7.”
Most of that will be Android, which will dominate the smartphone sector for the next four years. IDC expects Android to account for 61% of the smartphone OS market this year, driven largely by Samsung sales. On the downside, that’s as good as it’s going to get - Android’s market share will slip to just under 53% by 2016.
Ovum predicts that there will be major opportunities and challenges for the TMT sector