Mobile device leaders Google and Apple are about to face new challenges as the theater of mobile competition shifts from its current markets to the developing world. Flurry announced earlier today its forecast of where the second billion mobile devices will be shipped and why international markets will become an increasingly important part of the mobile economy. Flurry predicts that international shipments will double the world's 1 billion currently active smartphones and tablets by 2014. This shift plays to Android's strengths in openness and price, and will test Apple's ability to adapt to a market share acquisition strategy.
A combination of evolving mobile capabilities and upgraded global infrastructure has precipitated explosive worldwide growth of smartphones and tablets. Surprisingly, the U.S., with a 47% annual increase in active mobile device growth between April 2012 and April 2013, ranked in the bottom 5% of countries ranked by growth rate. In developing countries, 200% and 300% growth rates are not unusual because the change from early adoption to mainstream occurs so quickly and is proportionally large.
Flurry underscores the enormous growth potential of emerging markets by focusing on four of the 168 countries in their report - the U.S., China, Malaysia, Canada and India - with a chart comparing the population of each with the number of active devices. With a strong growing economy, roughly the same amount of active mobile devices as the U.S., and a population more than four times larger, China represents an enormous immediate growth opportunity. India, with a population almost equal to China's, is comparatively earlier in its adoption of tablets and smartphones. With a less robust economy, it has a potentially large impact, but later in time.
Correlating Flurry's forecast, IDC's Worldwide Quarterly Smart Connected Device Tracker weighed in with a slightly more conservative 2014 forecast of 1.7 billion smartphones and tablets. IDC predicts that one billion of those units will ship to the emerging markets with over two thirds concentrated on the BRIC countries, Brazil, Russia, India and China.
IDC's report defines the phenomena not only as a shift in markets but a shift in platforms. Tablet shipments would exceed portable PC shipments in these markets, confirming the erosion of the Wintel architecture as tablets replace many of the PC use cases at lower average selling prices (ASP).
With Google Play generating two thirds of its revenues from international markets, Google has gotten in early on this geographic market shift. At Google I/O last month, Google senior vice president Sundar Pichai pointed developers to the potential of large, fast-growing emerging markets with less than 10% Android market penetration and a total population of more than 4.5 billion people. He was followed by product and service announcements specifically targeted to helping developers reach international markets. This included development tools that enable developers to internationalize apps more easily and a Google-operated translation marketplace to simplify and accelerate the introduction of localized apps for new markets.
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