More than a billion smartphones will ship in 2013, fuelling a microprocessor boom

Full-year smartphone shipments are expected to exceed a billion units worldwide for the first time in history during 2013, giving a massive boost to the processor sector, according to new figures.

According to new IDC figures, the billion unit full-year shipment figure represents a 39.3% growth rate over 2012, with that figure projected to grow further to 1.7 billion handsets worldwide by 2017.

To put those figures into perspective, it is projected there will be 227.3 million tablets shipped worldwide during 2013, 158 million television sets, 180.9 million portable PCs and 134.4 million desktop PCs.

The IDC figures also show consumers are increasingly opting for lower cost smartphones, with the average selling price (ASP) falling from $US387 in 2012 to $US337 in 2013, and is expected to fall further to around $US265 by 2017.

The ASP represents the price at which handset manufacturers sell smartphones to carriers, retailers and other distributors before subsidies.

By continent, the Asia/Pacific region remains the most important market for smartphones, for more than half (52.3%) of all shipments and 528.2 million units, followed by Europe (18% and 182.1 million), North America (15% and 151 million), Latin America (9% and 91.1%) and Africa/Middle East (5.7% and 57.6 million units).

However, North America remains the most lucrative market with an average selling price of $US531, followed by Europe ($US419), Africa/Middle East (US338), Latin America (US288) and the Asia/Pacific region ($US262).

North America is also the only continent where the ASP of smartphones is predicted to rise, by 2.1% in 2017, while large price falls of around 9% predicted in both the Asia/Pacific region and Europe.

“Particularly within emerging markets, where price sensitivity and elasticity are so important, prices will come down for smartphones to move beyond the urban elite and into the hands of mass market users,” IDC mobile phone research manager Ramon Llamas says.

“Every vendor is closely eyeing how far down they can price their devices while still realizing a profit and offering a robust smartphone experience.”

The rapid growth in smartphone and tablet shipments is expected to lead to a massive growth in processor shipments, with a separate study by IHS predicting the total number of processors shipped worldwide to expand 24% during 2013.

In total, 1.5 billion microprocessors will ship worldwide during 2013, up from 1.21 billion in 2012.

Despite worldwide falls in PC shipments over six consecutive quarters, microprocessor shipments increased 27% year-on-year during the first quarter, 24% during the second quarter, around 19% during the third quarter, and are forecast to grow 24% in the fourth quarter.

“The overall processor market would not be so healthy if it weren’t for smartphones and tablets,” said Gerry Xu, senior analyst, processor research for IHS.

“The PC market that traditionally drove the growth of the microprocessor segment has slowed. The new mobile platforms have more than picked up the slack, delivering both large volumes and fast growth for processor shipments.”

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