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18th January 2013

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Two separate pieces of research from Nielsen and Canalys have shown how the BRIC (Brazil, Russia, India, China) market is going to explode in terms of smartphone development.

The key takeaway from the Canalys report was that China’s smartphone market is growing at such a rate that it will be nearly double the size of the US market this year, and the advice to operators is: make hay while the sun shines in emerging markets, before your competition gets there first.

Canalys predicts that China will absorb 240 million units – 29% of the global total of smartphone units – compared to the United States’ 125m smartphones in 2013.

Of course, China currently leads in smartphone shipments, but it only overtook the US as recently as Q1 2012. This has come as a result of a move towards Android-based low-cost phones in China, which “drastically accelerated the decline of feature phones” according to Canalys, with a further prediction that other emerging markets, like BRIC nations, will experience similar upheaval.

Canalys further forecasts that developing markets will contribute between 70% and 80% of smartphone growth this year, with no developed market making the top 20 new growth markets for 2013.

Equally, 2013 will also see more Chinese vendors moving into overseas markets, mirroring the likes of Huawei and ZTE. Evidently, it’s a trend which can be noted throughout China’s tech industry – for example Chinese-language ISP Baidu partnering with Orange earlier this month.

Jingwen Wang, Canalys research analyst, said of the expansion: “Only very few Chinese smartphone makers have comprehensive or long-term international expansion plans in place.

“Their goals are straightforward; to grow economies of scale or fulfil production capacity and to increase profit margin as pricing pressure is lower in overseas markets.”

The Nielsen research revealed some intriguing insights into the state of emerging smartphone markets in the BRIC nations.

Of the four countries, China is most smartphone ready with 66% of mobile subscribers using one compared to 25% feature phone and 9% multimedia phone – although it was noted in the research that due to the study’s online-only methodology, the rural population was not adequately accounted for, resulting in arguably higher smartphone penetration.

Brazil’s was the most confusing market, with 44% feature phone, 36% smartphone and 21% multimedia phone, with India at the opposite end of the scale (80% feature phone, 10% smartphone, 9% multimedia phone).

Both reports show the power that’s in China’s hands right now, but how big can the BRIC smartphone market become?

About the Author

James has a passion for how technologies influence business and has several Mobile World Congress events under his belt. James has interviewed a variety of leading figures in his career, from former Mafia boss Michael Franzese, to Steve Wozniak, and Jean Michel Jarre. James can be found tweeting at @James_T_Bourne.

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