Why There's Still Plenty of Smartphone Growth Left

Notable venture capitalist Mary Meeker released her annual report on major trends in tech. Despite all of the recent talk that smartphones are approaching saturation, only 30% of the 5.2 billion mobile phone users today are using smartphones. That remaining 70% represents massive opportunities for smartphone manufacturers. Going forward, much of the growth will come from under-penetrated developing countries like China, India, Brazil, and Indonesia.

China's smartphone penetration is just 31%, while India's is only 10%. The two largest countries in the world by population have a lot of runway. If penetration for each country climbs to 60% in the coming years, that represents an additional 1 billion users. 

Apple's (NASDAQ: AAPL  ) smartphone unit sales growth has lagged the broader market for many quarters, as the growth is now coming from the low-end. Global average selling prices have fallen from $430 in 2008 to $335 in 2013, much of which was driven by Android. Still, unit share doesn't always translate to profit share, and it's here where Apple has an advantage.

In this segment of Tech Teardown, Erin Kennedy discusses the smartphone market with Evan Niu, CFA, our tech and telecom bureau chief.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. But the secret is out, and some early viewers are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


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  • Report this Comment On May 30, 2014, at 8:10 PM, skippywonder wrote:

    One under-reported angle of this whole Beats deal is that they are keeping the Beats brand. People report it, but it is generally without comment. Or that the move is "surprising".

    But if you take these ideas:

    1) Beats is a fashionable brand among teens.

    2) Mobile is moving to wearables.

    3) No one really knows how this whole "wearables" thing is going to go.

    4) Wearables will be subject to whims of fashion as much as tech.

    Then Beats may have an important role to play. Specifically, Apple may use Beats as a way to introduce wearable product ideas to teens without risking the rejection of an "Apple" product. That is, they can use Beats as a sub-brand and experiment with different ideas without the fanfare, drama, and risk of an Apple product roll-out.

    Wearables are going to take a while to get right. A sub-brand may allow them some flexibility that we aren't generally appreciating.

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Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 2977624, ~/Articles/ArticleHandler.aspx, 11/26/2014 6:35:18 AM

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