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Mid-market mobiles to drive device market growth

The growth of the mobile phone market in 2014 is projected to come from the lower end of the premium phone market and the higher end of the basic phone market, according to new research from Gartner. Overall, mobile shipments are expected to increase 4.9 per cent over the year to reach 1.9 billion units by the end of 2014, with further growth to 2 billion projected for 2015.

“While the lack of compelling hardware innovation marginally extended replacement cycles in 2013, we’ve witnessed an upgrade path in the emerging markets,” said Annette Zimmermann, principal research analyst at Gartner. “Latin America, the Middle East and Africa, Asia/Pacific and Eastern Europe have all upgraded their phones, which will help to compensate for mature market weakness in the near term.”

The worldwide tablet market is forecast to grow 38.6 per cent this year as overall adoption continues to grow faster in markets outside North America. Shipments are expected to reach 271 million units by the end of this year, up from 195 million last year, and are forecast to reach 349 million in 2015.

“The adoption of tablets has been largely concentrated in the U.S., with the dominance of Apple,” said Ranjit Atwal, research director at Gartner. “Market dynamics in other regions are different, as the uptake of lower cost, smaller, non-branded tablets, becomes more apparent.”

Worldwide shipments of traditional PCs are forecast to total 277 million units in 2014, a 6.6 per cent decline from 2013. This decline should continue into 2015, with shipments forecast to drop to 263 million.

“The traditional PC category continues to decrease, with only about two-thirds of notebook and desktop replacements remaining within this category,” said Atwal. “The majority of the remaining one-third will move to ultramobiles [Gartner’s term for tablets, hybrid devices and clamshells], while others will not be replaced at all.”

In the operating system market, Gartner says iOS tablet growth has slowed in North America and suggests that Apple will need to reinvigorate its replacement cycle. Worldwide, iOS/Mac OS accounted for 241 million devices (including PCs) in 2013, up 19 per cent, and should reach 286 million this year, rising to 324 million in 2015. Windows is showing slower growth (just 4 per cent) to reach 339 million devices this year, rising to 379 million in 2015.

But it’s Android that is dominating the OS sector, with an expected 1.171 billion units this year – breaking the one billion barrier – up 33 per cent on 2013, and a forecast increase to 1.358 billion in 2015.

Worldwide combined shipments of devices – PCs, tablets, ultramobiles and mobile phones – are projected to reach 2.5 billion units in 2014, a 6.9 per cent increase from 2013. Gartner says sales of traditional PCs will continue to hamper the overall growth of devices, and substitution from PC to tablet will decline. As the overall device market starts to saturate, the increasing pressure on margins will continue, and vendors will look at different ways to cope with the ongoing issue of lower margins.

“Tablet substitution of notebooks will start to dissipate from this year onwards as consumers and businesses align the right device with the right usage pattern,” said Atwal. “As they do this, we will see where dedicated devices (such as tablets), or hybrid devices (detachable or convertible devices), fit in the overall portfolio of devices.”

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