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Cheaper phones as sales growth slows

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Growth in global smartphone sales is slowing, pressuring manufacturers to bring down prices to win customers in new markets, a research firm says.

Market tracker IDC said in its updated forecast that worldwide smartphone shipment growth will slow to 19 per cent in 2014, and into single digits by 2017, after a strong 39 per cent advance in 2013.

IDC forecast sales of 1.2 billion smartphones in 2014, but with little growth in mature markets such as North America and Europe, which are near saturation, and a possible contraction in Japan.

That means most of the growth will be in emerging markets, where consumers will be looking for low-cost smartphones.

IDC’s Ryan Reith said 2014 will see “rapidly declining price points, creating challenging environments in which to turn a profit”.

Average selling prices are expected to drop from $335 in 2013 to $260 by 2018.

“In order to reach the untapped demand within emerging markets, carriers and (manufacturers) will need to work together to bring prices down,” IDC’s Ramon Llamas said.

“Last year we saw a total of 322.5 million smartphone units ship for under $150 and that number will continue to grow going forward. We’ve already seen numerous smartphone announcements targeting this price band this year, with some as low as $25.”

IDC sees Android holding its dominant position with more than 75 per cent of global sales into 2018, and Apple remaining second with a market share near 15 per cent.

The research firm said the biggest gains are likely to be in Windows Phone, seen as picking up to seven per cent from 3.9 per cent in 2014.

BlackBerry’s market share is expected to be just one per cent in 2014 and 0.3 per cent by 2018, IDC said.

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