China will be top mobile phone market by end of 2014

Warc, 2 June 2014

BEIJING: China is on track to overtake the US for mobile phone revenues this year, making it the world's largest mobile phone market by value, a new report has forecast.

According to Boston-based research firm Strategy Analytics, mobile phone sales are expected to grow 15% to a record 430m in China this year while revenues will increase an impressive 53% to $87bn.

By contrast, the maturation of the US market will see revenue growth of only 4% to $59.5bn in 2014 while mobile phone sales will remain static at 163m units, the report said.

However, even though China will forge ahead of the US for mobile phone revenues, Strategy Analytics emphasised that the US will remain the most profitable mobile phone market in the world, or at least for the time being.

China's rapid growth is being driven by the country's rapid adoption of 3G and 4G smartphones, the report said, as well as the ability of major brands to expand their distribution channels and product ranges to meet "extremely strong demand" for more advanced mobile phones.

And in further evidence that the country will be a crucial market for device manufacturers, a separate report from the International Data Corporation (IDC) forecast China would account for nearly one-third of all global smartphone shipments in 2018.

IDC predicted smartphone shipments worldwide will reach 1.2bn this year, up 23.1% from 1bn in 2013, and will grow to 1.8bn in 2018.

It said China – and other major emerging economies, such as India, Indonesia and Russia – will offer multiple opportunities to vendors and carriers, but cautioned that "the key will be balancing affordability with expectations".

Android will account for the vast majority (80.2%) of worldwide smartphone shipments in 2014, followed by iOS with 14.8% and Windows Phone with 3.5%.

IDC expected Android's market share to fall slightly to 77.6% by 2018 with iOS remaining the second-largest player with 13.7% of the global market.

Data sourced from Strategy Analytics, IDC; additional content by Warc staff