The smartphone revolution, triggered in 2007 by the launch of the iPhone, is rapidly shifting the focus of the global mobile phone market from feature phones to smartphones.
Smartphone shipments in 2013 increased to 930 million units, rising 33.1 percent compared to the previous year. This is the first time that smartphone shipments have exceeded that of feature phones. The share of smartphones in the entire mobile phone market is expected to rise 11.5 percentage points from 44.3 percent in 2012, reaching 55.8 percent in 2013 and illustrating the accelerating spread of smartphones worldwide
The Korean mobile phone industry is being rapidly realigned due to the rise of smartphones. Smartphone shipments accounted for only 1.0 percent of all mobile phone shipments in 2007 but soared to 52.9 percent in 2012. Shipments and sales revenues of smartphones recorded particularly remarkable growth over the past three years. Between 2010 and 2012, sales revenues rose nine-fold from USD 8.2 billion to USD 72.9 billion, and shipments jumped by 8.2 times, from 30 million units to 247 million.
Smartphone sales grew both in advanced markets that focus on high-end models and emerging markets with low-end ones. The share of Korean smartphone companies in advanced markets rose by 24.0 percentage points from 11.1 percent in 2010 to reach 35.1 percent in 2012. The share in emerging markets also increased by 24.6 percentage points from 10.1 percent, reaching 34.6 percent during the same period.
The competitiveness of Korea's smartphone industry has been strengthened steadily for the last three years. As a result, the global market share ranked sixth at 4.2 percent in 2008, fourth at 10.0 percent in 2010 and first at 24.0 percent in 2011. In 2012, it grew further — to 35.3 percent — becoming a leader of the global smartphone industry.
Korean companies have unrivaled advantages in technology, production capacity, global distribution channels, brand awareness, marketing strategies and the vertical integration of core components (application processors, memory semiconductors, display panels, batteries, camera modules, etc). Based on these advantages, they have secured a strong presence in the smartphone industry in a relatively short period of time.
There are two key concepts this year in the smartphone industry. The first is the explosive growth of long term evolution (LTE) smartphones. The sales volume of LTE smartphones is expected to record up to 194 percent growth from 92 million units in 2012 to 270 million in 2013. Korean companies are leading the global LTE smartphone market, with a market share of 45.4 percent in 2012. They plan to accelerate the market release of new flagship models targeting advanced markets, as those countries are expected to account for 68 percent of all LTE smartphone sales.
The second key concept is the increasing impact of emerging economies including China on the global smartphone market. The smartphone sales volume in emerging countries is expected to increase 44.7 percent compared to the previous year to 610 million units, exceeding that of advanced economies (15.7 percent, 320 million units). As the share of emerging nations in the global smartphone market rises by 5.3 percentage points from 60 percent in 2012 to 65.3 percent in 2013, competition between manufacturers to dominate these markets is expected to become fiercer. The rise of emerging economies will help expand the global influence of Korean companies based on their price competitiveness, products tailored to meet various demands and strong brand awareness.
Korean players are expected to continuously boast strong performance on the global stage. Major Korean smartphone manufacturer Samsung Electronics has recorded a series of hits with its flagship models, including the Galaxy S (June 2010), Galaxy S2, Galaxy S3, Galaxy Note and Galaxy Note2. With the success of these high-end models, Samsung Electronics has ranked No.1 in the global market, outcompeting rivals such as Nokia and Apple. The company plans to release 350 million units of smartphones around the world this year, which is 65 percent more than last year. The Galaxy S4, introduced in New York on March 14, is included in the newly released models. LG Electronics is also expected to establish a lineup of smartphones ranging from high-end products (Optimus G, Optimus G Pro) to low-end models (Nexus 4, L/F Series). LG smartphone shipments are predicted to record 40 to 50 million units this year, and it is highly possible that LG will become the No. 3 manufacturer in the global market.
So far, the world-class hardware capability of Korean companies has strengthened competitiveness in both quality and price, and the companies will continue to come up with differentiated products in the global market through innovation in UI (user interface) and UX (user experience). Given this strong competitiveness, it seems the companies will meet their sales goals this year without trouble and that Korea will solidify its presence as a global smartphone leader.
Source : Invest Korea
