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Emerging Markets Driving Smartphone Growth - Analyst Blog

As the next-generation handsets, smartphones are continuously gaining popularity throughout the world. Characterized by advanced operating systems, these devices are capable of supporting a wide variety of services and applications.

Recently, research firm IDC projected that smartphone shipments worldwide will likely reach 1.2 billion this year, up from 1 billion in 2013. Furthermore, the upside will probably be sustained and the smartphone market is expected to reach 1.8 billion by 2018.

Importantly, the major surge in the smartphone growth is expected to come from the emerging markets of China, India, Indonesia and Russia. Another research firm, Strategy Analytics predicts that the Chinese smartphone market size may reach $87 billion in 2014, breezing past the current market leader, the U.S., which is expected to generate smartphone revenues of $60 billion.

IDC also reported that that the average selling price (ASP) of smartphones will decline to $314 in 2014 from $335 in 2013. The fall in Smarphone ASP will continue in next few years may even go down to $267 by 2018.

Intense competition within smartphone developers and the geographic shift of the core smartphone base from the economically developed western world to low-cost emerging markets are the primary reasons that will lead to the secular fall of ASP. Strategy Analytics forecasted 15% year-over-year growth in mobile phone sales to a record 430 million units in China in 2014.

The major three softwares that are likely to dominate the smartphone operating system include Google Inc. ( GOOG )-developed Android, Apple Inc. ( AAPL )-developed iOS and Microsoft Corp. ( MSFT )-developed Windows Phone software. Similarly, Qualcomm Inc. ( QCOM ), the largest global mobile chipset manufacturer, will immensely benefit from the smatphone market boom.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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