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Key Trends in the Global Smartphone Market: Part 1

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1.2 billion smartphones were sold globally in 2014, and in the first quarter of 2015, smartphone unit demand was up +7% on the same period of last year. So what is driving this continuing success story? We’ve identified four key trends influencing the global smartphone market.

1. Bigger Screens

Globally, sales of smartphones with larger screens (5”+) grew +180% in 2014, and have continued to drive growth in the first quarter of 2015. Share of such devices grew from 32% – or one third – of the global smartphone market in the first quarter of 2014, to 47% – almost half – in the first quarter of 2015. So it is no surprise that super-sized screens are expected to be the largest sales segment worldwide in 2015, surpassing the 4 to 4.5” segment for the first time.

Share of large screen devices in North America hit 70% in the first quarter of 2015, up from 59% in the same period last year, driven by strong demand for high-end models.

In China, where the trend is particularly pronounced, large screen smartphone unit share grew dramatically to 57%, up from 32% in the first quarter of 2014. This significant increase in share was driven by cheaper large screen models flooding into the Chinese market.

This upwards screen size migration is expected to continue in 2015, with global demand for large screen devices increasing by +30% year-on-year to account for 69% of total smartphone unit demand in 2015.

Despite smartphone units declining by -14% year-on-year in the first quarter of 2015, total value actually increased by +6% year-on-year as Chinese consumers enthusiastically adopted higher priced smartphones with larger screen sizes, a trend seen in all regions.

2. The rise of 4G

4G-enabled devices surpassed 50% share of the global smartphone market for the first time in the first quarter of 2015, buoyed by continued price erosion of 4G smartphones. Our forecasts point to 4G device share increasing further in 2015, reaching 59% in quarter 4 of 2015.

Smartphone growth in the world’s largest market, China, slowed slightly in 2014. This was due to a significant slowdown in 3G demand, which was not offset by 4G growth. We expect the China smartphone market to decline in the first half of 2015, before returning to growth in the second half, driven by a continued 4G ramp-up. China saw the greatest 4G share increase in the first quarter of 2015 – up 16 percentage points to 73%, from 57% in the last quarter of 2014.

Smartphone growth in India and Indonesia is expected to be helped by an expanding 4G network. In Q1 2015, 4G share in both countries was well below the global average, at 4% and 7%, respectively. We estimate 4G share will increase to 7% in India and 10% in Indonesia by the end of 2015.

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