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.

Erin Kennedy owns shares of Apple. Evan Niu, CFA owns shares of Apple. Evan Niu, CFA has the following options: long January 2015 $460 calls on Apple and short January 2015 $480 calls on Apple. The Motley Fool recommends Apple. The Motley Fool owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.