The global smartphone market was valued at USD 1,471.94 million in 2021. It is expected to reach USD 1,726.77 million by 2030, growing at a CAGR of 1.79% during the forecast period (2022–2030). Smartphones are a subclass of mobile phones that distinguish them from feature phones in terms of their powerful hardware, software, and range of mobile operating systems. Web surfing, voice and video chats, music, video, gaming, and camera capability are just a few of the many features that a smartphone offers. It also contains multimedia, audio, and video functionality. Smartphones employ a variety of operating systems, such as iOS (by Apple), Android (by Google), Windows (by Microsoft), Blackberry Operating System, and others. With the expansion of social media sites like Facebook and Twitter, smartphone usage has surged. Over time, smartphones have included the global positioning system (GPS), gyroscope, flash memory, optical fingerprint sensors, near field connection (NFC), augmented reality, virtual reality, and other cutting-edge technologies.
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Launch Of 5G Technologies, Devices, and Services
Several end-user industries are investing heavily in 5G across various global markets. The availability of 5G connectivity is expanding the use cases that can boost various industries' productivity. Consumers are increasingly expecting digital engagement and personalized experiences overall due to the proliferation of technology in smartphones. Other technologies, including improved cameras, screens, foldable smartphone technology, etc., are also accelerating the development of the market under investigation. During the forecast period, a sizable customer base is anticipated for the foldable smartphone, which combines the benefits of a large-screen tablet with the portability of a smartphone. By releasing newer products on the market, industry leaders like Samsung and Huawei have set the trend for this foldable technology.
Rising Demand for New Economic Strategies
Due to a growing technology proliferation in these nations, the emerging countries of developing regions, including Latin America, the Middle East, Africa, and some areas of Asia and Europe, are seeing an increase in smartphone demand. The IMF recently predicted that due to government support, an improving legal system, market leader expansions, etc., economic growth in emerging markets would be faster (4.7% faster) than in developed markets. These trends are also anticipated to open up several expansion opportunities for regional and international OEMs to grow in these markets through innovative strategic partnerships. The commercialization of 5G technology in Latin American nations like Mexico, Chile, and Argentina is one trend that is anticipated to increase demand for 5G-capable smartphones.
The demand for smartphones is stagnating due to recent innovations failing to attract new customers or encourage existing customers to upgrade their current smartphones. The premium pricing of products due to technology integration may be one of the factors influencing this trend. Additionally, while boosting their existing models, OEMs cannot differentiate their products in a way that meets customer expectations. Consistent features, designs, and technologies across brands in the same price range limit the demand for new smartphones. Another significant factor restraining the growth of the smartphone market is price reductions while maintaining substantial innovations. The cost of technological advancements is higher, raising the finished goods' price and reducing demand for expensive smartphones. The rising cost of raw materials further exacerbates the challenge faced by the manufacturers.
One of the key drivers expected to give OEMs opportunities to increase their market presence and support growth in the future is the 5G technology. According to a study by Ericsson, the number of 5G subscriptions worldwide is predicted to reach 3.5 billion by 2026. Demand for technology and infrastructure is also expected to increase globally. Future market growth for smartphones is anticipated to be significantly fueled by these trends. Smartphone manufacturers should have growth opportunities in the future thanks to flexible and foldable displays. The demand for these foldable smartphones will probably increase if the manufacturers can lower the cost of making the components of these devices, such as flexible OLEDs, circuits, sensors, and batteries, specifically built for these devices.
Focusing on lowering costs, boosting new capabilities, implementing product differentiation, adopting a unique aesthetic, and industry demand for 5G models may create more opportunities for flexible OLED displays, thereby assisting the growth of the smartphone market. Additionally, it is anticipated that the increasing demand for miniaturization in consumer electronics and multi-screen devices will create several growth opportunities.
The global smartphone market is segmented by the operating system.
Based on the operating system, the global market is bifurcated into android and iOS.
The android segment owns the highest market share and is expected to grow at a CAGR of 1.47% during the forecast period. The Android operating system, created based on Linux for smartphone applications, was first introduced in 2008. The OS has changed in terms of design, concept, and functionality over the course of its development, beginning with versions 1.0 and 1.1 in 2008 and concluding with Android 12 in 2021. The operating system's open-source license enables producers and developers to create and modify smartphone software for the target market. Android comprises several software layers, including the Linux kernel, runtime, libraries, user-created applications, for-profit applications, built-in applications, and commercial applications. Even though Apple iPhone platforms that use iOS are viral, the android OS is still regarded as one of the most widely used platforms. The first beta version of the most recent Android 12, developed by Google, was released in May 2021. By August 2021, Google anticipates releasing beta versions 2, 3, and 4. The new privacy dashboard in this version gives users easier-to-understand information on how applications are accessing their data.
The iOS operating system, formerly known as the iPhone OS, was created by Apple Inc. in 2007, one year before the creation of the Android operating system. Users have had access to updated OS versions every September since the OS's initial release. Due to cost considerations, the versions ranged from iPhone OS 1 to iOS 15 and were primarily used in developed economies in North America. Due to the absence and postponed release of new iPhone models, iOS shipments have decreased in recent years. Users of Apple smartphones can also add 3D animated objects and characters to the AR environment using the AR kit. The kit also draws in GenZ customers worldwide, including motion tracking, location anchors, camera scene capture, scene processing, and displaying. Additionally, using an A12 Bionic Chip, the iOS expanded tracking support to include face tracking. The OS's ongoing developments are driving the global smartphone market.
By region, the global smartphone market is segmented into North America, Europe, Asia-Pacific, Latin America, GCC, and Africa.
Asia-Pacific Dominates the Global Market
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Asia-Pacific is the most significant global smartphone market shareholder and is expected to grow at a CAGR of 2.98% during the forecast period. Entry-level smartphone demand is anticipated to be driven by rising demand from the region's developing nations, including India and Indonesia, where smartphones increasingly gain traction in rural areas as local governments push for mobile and digital economies. For instance, the Government of India's flagship program, Digital India, aims to make the nation a society where everyone can access the internet. One of the main factors driving the growth of 5G devices in India is the country's rate of increase in data traffic. Over the past five years, data traffic increased roughly 60 times, ranking among the highest globally. Additionally, India introduced the PLI Scheme, which offered a 6-4% incentive for five years on additional manufactured phone sales from 2019 to 2020. High-end international mobile phone manufacturers—those that produce handsets costing over USD 200 USD—had to sell INR 400 million worth of goods in 2020–21 to be eligible for the incentives. These government initiatives are anticipated to increase the country's smartphone market during the forecast period.
Latin America is expected to grow at a CAGR of 4.98%, generating USD 196.94 million during the forecast period. Some nations in the Latin American region are also preparing to eventually deploy 5G as first movers in the 5G space, with countries like China, South Korea, and the United States setting global standards for technological developments and applications. By 2026, Ericsson projects that there will be close to 184 million 5G mobile subscriptions in the region. The GSMA predicts that Mexico and Uruguay will first introduce 5G technology in the region. For instance, Nueva Palmira, a municipality in Colonia and La Barra, Maldonado Province, has already received a commercial 5G network from Antel Uruguay and Nokia. Similarly, Mexican-based Telcel announced the rollout of a 5G network in Mexico in 2020. As the availability of 5G devices, from smartphones to fixed-wireless equipment, grows, dynamic spectrum sharing might be a factor in accelerating the rollout of 5G in Latin American nations that have recently allocated more frequencies for mobile broadband.
Most of the population in Africa is mainly unable to access smartphones due to their higher price. To address these issues, Orange announced the release of the Sanza touch, an exclusive orange smartphone and one of the most affordable 4G Android devices, in September 2020 as part of the schedule of events for the GSMA Thrive Africa 2020. The device's ultra-affordable price point was intended to make it the most accessible device on the market to promote digital inclusion and give many more people access to mobile internet, according to the company, which stated that the device would retail for around USD 30. Telecoms in the area collaborate with device manufacturers to promote and ease the use of 5G technology. Government initiatives encouraging device manufacturers to produce affordable 5G devices will also hasten the region's adoption of 5G.
Arab states are emerging as 5G pioneers thanks to the allotment of spectrum by the governments and regulators, as well as the implementation of some of the world's first and fastest 5G networks by operators. The GCC countries are investing more money in extending the reach of their commercial 5G networks. In preparation for their upcoming commercial launches, Etisalat and Ooredoo have been conducting live 5G trials on speed, hardware, latency, and beam steering (for signal distance). 2019 saw the launch of the 5G-capable ZTE Axon Pro 10 handset by UAE mobile operator du, and future 5G device releases are anticipated from the company. The operator's introduction of 5G-capable devices was a significant step in its goal to emerge as a key 5G player in the area. Since telecom providers have begun offering cutting-edge devices to their customers, the adoption rate of 5G in the area will undoubtedly rise. Several network operators are working to develop 5G infrastructure in the area. A 5G network will be introduced in the kingdom by the Saudi telecom provider STC through partnerships with Nokia and Huawei. Along with other companies, Ericsson has participated in trials in the area.
The US smartphone market is expanding due to several critical factors, including the capabilities of 5G smartphones and the increasing advancements in smartphone features. One of the most developed markets in the world for smartphone vendors is the United States. The region has a history of producing cutting-edge smartphones, particularly with companies like Apple, which have altered the market dynamics of the global smartphone market in the past. Despite the fluctuation in smartphone shipments observed across the United States in 2019–2020, growing vendor investments and consumer awareness of 5G may revitalize the nation's smartphone market in 2020–21. Due to the popularity of its iPhone 12 and improvements in the upgrade cycle from a more extensive base of iPhone 6S, 7, and user base, Apple surpassed Samsung in 2019. Furthermore, the market is anticipated to grow as faster networks, and the increasing popularity of unlimited data plans enable subscribers in North America to access various entertainment services on their smartphones.
The region has demonstrated a sizable demand for smartphones from several nations, including Germany, France, and the United Kingdom. The smartphone is expected to play a more significant role in the IoT ecosystem as it becomes an essential tool for the medical sector. As a result, MEM sensors that support medical devices and applications by measuring body vitals, like body temperature, among others, are increasingly being incorporated into smartphones by manufacturers. Additionally, it is anticipated that smartphone penetration levels will rise with the growing use of smartphones for activities like mobile payments, gaming, and entertainment. Due to increased functionality and rising consumer demand, domestic and international vendors collaborate and innovate in the regional market.
Samsung Electronics Co. Ltd, Huawei Technologies Co. Ltd, Apple Inc., Xiaomi Corporation, BBK Electronics Corporation (Vivo, Realme, Oppo, and OnePlus), Lenovo Group Limited, HTC Corporation, HMD Global Oy, Sony Corporation, ZTE Corporation, and Google LLC.