IDC: Smartphones Ship A Billion Units,  Microsoft to See Maker Interest Decline

Mobile phones of all kinds are rebounding, with strong growth in 2013 and with smartphone shipments exceeding one billion units for the first time in a single year. Windows Phone is solidifying its third-place position among mobile operating systems, even as non-Microsoft handset makers will likely become less interested. Those are key takeaways in the new mobile phone market forecast from industry research firm IDC. 

The report, the Worldwide Quarterly Mobile Phone Tracker [purchase required], said that mobile phone growth rate for this year is expected to be 7.3 percent compared to 2012, when the growth rate was only 1.2 percent. The previous projection for this year was a growth rate of 5.8 percent.

Soon, Almost All Smartphones

Demand for mobile phones is spread across every region, driven by faster-than-expected growth in the first half of the year in emerging markets and by sales of smartphones priced under US$ 200. Total shipments of all mobile phones are projected to top 1.8 billion units in 2013, climbing to 2.3 billion in 2017.

For smartphones in particular, the growth rate is expected to be a phenomenal 40 percent year-over-year, largely attributed to substantial device subsidies from carriers in mature markets and a growing number of sub-$200 devices.

By 2017, smartphone shipments are expected to reach 1.7 billion units. In other words, smartphones will represent slightly more than half of all mobile phones shipped this year, while there will be nearly three-quarters of all mobiles by 2017.

In fact, IDC Senior Research Analyst Kevin Restivo told news media that, in many of the world's most developed economies, "smartphones will represent virtually all of the mobile phone market” by 2017.

Whither Windows Phone?

Ramon Llamas, Research Manager of IDC’s Mobile Phone team, pointed out in a statement that "two years ago, the worldwide smartphone market flirted with shipping half a billion units for the first time." He added that doubling that total in just two years "highlights the ubiquity that smartphones have achieved” as they have become an essential part of the lives of billions of people.

In the no-surprise department, Android and iOS remain the first and second place mobile platforms, respectively. Windows Phone inched ahead of BlackBerry in the first half of this year to barely take third place at 3.9 percent in market share, compared to Android’s 75.3 percent and iOS’ 16.9 percent. BlackBerry is at 2.7 percent, which IDC forecasts will drop to 1.7 percent by 2017.

It remains to be seen if Microsoft's purchase of Nokia’s phone business will significantly boost its worldwide market share, but it will certainly put the maker of Windows Phone in a better position to control its own fate among handsets. A negative effect of the purchase, as noted by IDC, is that the interest of other device makers in Windows Phone is expected to decline, now that Microsoft is a device maker.