Android Fuels Worldwide Growth in Smartphone and Tablet Shipments

Anup Varier October 31, 2013
Android Fuels Worldwide Growth in Smartphone and Tablet Shipments

The growth can be attributed to vendors from outside the top 5 who sell ultra-low cost Android devices at often unsustainably low margins.

Android products once again drove much of the shipment growth in the tablet and smartphone market as iOS growth stalled and Windows continued to struggle to win over consumers. The worldwide tablet shipments grew 36.7 percent YoY to 47.6 million units while the worldwide smartphone shipments grew 38.8 percent YOY to 258.4 million units in the third quarter of 2013, according to preliminary data from IDC’s Worldwide Quarterly Trackers.

In the tablet market, vendors from outside the top five - such as Amazon, Microsoft, HP, and Dell - and lesser-known, so-called white box vendors, that typically sell ultra-low cost Android devices at often unsustainably low margins, were responsible for over one third of the shipments in 3Q13. "White box tablet shipments continue to constitute a fairly large percentage of the Android devices shipped into the market," said Tom Mainelli, Research Director, Tablets at IDC.  The low cost Android-based products make tablets available to a wider market of consumers.

However, many vendors use cheap parts and non Google-approved versions of Android that can result in an unsatisfactory customer experience, limited usage, and very little engagement with the ecosystem. “Android's growth in tablets has been stunning to watch, but shipments alone won't guarantee long-term success. For that you need a sustainable hardware business model, a healthy ecosystem for developers, and happy end users," cautioned Mainelli.

Similarly, smartphone shipments, which went up seven percent when compared to the 437.4 million units shipped in 2Q13, were fuelled by Android. "Price points have declined significantly, driven largely by low-cost Android solutions. This has helped China to become one of the fastest growing smartphone markets in the world, accounting for more than one third of all shipments last quarter. We expect this trend to continue going forward," said Ryan Reith, Program Director with IDC's Worldwide Quarterly Mobile Phone Tracker.

The Android smartphone platform has created vast opportunities for new vendors to get into the smartphone space and, in turn, has produced new competitive pressures at the top of the market. Vendors from outside the top 5 continue to control nearly half the worldwide smartphone market in terms of shipments.

"Beyond Samsung and Apple at the top of the rankings is a tight race of vendors trying to break out from the pack," said Ramon Llamas, Research Manager with IDC's Mobile Phone team. "In 3Q13, Chinese vendors Huawei and Lenovo moved past LG, and not far behind are two more Chinese companies, Coolpad and ZTE. Any of these vendors could change position again next quarter. But in addition to having close shipment volumes, they all have one key ingredient in common: Android,” he said.

Even Micromax, the second largest smartphone brand in India, which is also touted to pip Samsung in the domestic market, banks heavily on the popularity of the Android OS. It is only recently that the company has announced plans to launch a Windows phone. “This (Android) has been a huge factor in their (Chinese vendors) success, but it also speaks to the challenges of differentiation on the world's most popular platform," said Llamas.

Anup Varier is Principal Correspondent for Computerworld India. You can send feedback to anup_varier@idgindia.com. Follow him on twitter @WearyWarrior

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