Smartphone Sales Growth To Slow In 2014 - Gartner

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Revenues from smartphone sales are expected to slow during the year as cheaper devices from emerging markets put pressure on the product mix, said the research firm Gartner in a report published Thursday.

Even though Gartner expects smartphones to continue to drive overall sales in 2014, a higher number of manufacturers are expected to alter their portfolios to concentrate on low-cost smartphones.

Sales of high-price smartphones are expected to slow as low- and mid-price smartphones in emerging markets weigh on manufacturers to change the product mix to lower-end devices.

"While the top three mobile manufacturers are dominating the global mobile phone market, their share collectively fell in the fourth quarter of 2013 and yearly as Chinese and regional brands continue to raise their share," Anshul Gupta, principal research analyst at Gartner, said.

Gupta belileves that mature markets face limited growth potential as they become saturated with smartphone sales and a longer replacement cycle. He also dispelled the illusion of innovation around smartphones saying, "Lack of compelling hardware innovation has further exacerbated replacement cycles for high-end smartphones in 2013 because consumers don't find enough reasons to upgrade." 

International Data Corporation's Senior Research manager Melissa Chau seemed to echo this sentiment in a report issued Thursday by the market research firm, "We are now starting to see a market that is becoming less about capturing the low-hanging fruit of first time smartphone users and moving into the more laborious process of convincing existing users why they should upgrade to this year's model"

The report by IDC, however, said that after 9 consecutive quarters of tremendous growth, China's smartphone market experienced a slowdown in the fourth quarter of 2013; smartphone shipments in China fell by 4.3 percent from the third quarter. 

IDC cites several factors for the decline. China Mobile's 4G TD-LTE network went live on December, delaying the supply of 4G handsets to the markets fully until first quarter of 2014. The increasing popularity of phablets and channel inventory made operators cut the subsidies on phones with smaller screens, forcing distributors to push those stocks.

But recent signs indicate that smartphone makers in China are growing eager to expand in the international arena. Companies like Xiaomi, Oppo, BBK, Gionee are stepping up their efforts to penetrate international markets.
Looking at other emerging markets, India has risen to be number three of the largest smartphone markets in the world , elbowing past Japan, UK, South Korea, Germany and France, which stood higher in 2012, according to IDC.

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