This week the folks at IDC have released their quarterly tracking numbers for shipments of smartphones as listed by operating system. Alongside these numbers, IDC shows an smartphone average selling price (ASP) chart which shows a relatively clear trend: downward. Though many publishers today have chosen to follow the "Phablet" headline opportunity in this most recent report, this pricing trend is set to have one whole heck of a lot bigger an impact on the market in coming years.
According to IDC, smartphone average selling prices are declining. Amongst the top operating systems for mobile devices tracked today, only one hit a higher ASP this quarter than they did this same quarter last year - or indeed the quarter immediately before the one we're in now. Ironically this is BlackBerry, the operating system with the most bleak outlook in the smartphone shipments chart.
BlackBerry is quickly becoming obsolete, if only judging by the numbers shown by the IDC over the past year. Having still commanded a 3rd-place 4.1% of the market in the third quarter of 2012 with 7.7 million devices shipped, BlackBerry plummeted to 4.5 million units shipped here in Q3 2013, earning the brand a 1.7% share.
"Android and Windows Phone continued to make significant strides in the third quarter. Despite their differences in market share, they both have one important factor behind their success: price.
Both platforms have a selection of devices available at prices low enough to be affordable to the mass market, and it is the mass market that is driving the entire market forward." - Ramon Llamas, Research Manager with IDC's Mobile Phone team
Each of the brands whose devices saw lowering average prices grew significantly. Windows Phone grew 156% year-over-year, iOS grew 25.6%, and Android grew 51.3% - the market as a whole crew a whopping 39.9% year over year as well. That's nearly 40% more smartphones shipped this quarter than the same quarter last year across the world.
Though the prices of Windows Phones went up from the 3rd to the 4th quarter of 2012, they've been decreasing ever since. At the moment it's the "other" category that's leading the pack for lowest prices (an easy feat due to the miniscule 0.6% of the market they've got to deal with), while Android and Windows Phone drive an extremely similar path downward.
Meanwhile Apple's iOS sits far above the rest with ASPs (of course) only resting on the iPhone, a device which remains fairly consistent due to Apple's rather successful history with said prices over the past few years. Apple is the only brand on the list to have an ASP move upward from the 2nd quarter of 2013 to the 3rd - but the brand's trend does appear, in the long run, to be headed downward as well.
We presented the question of the spec race to Llamas to see what the IDC's idea of the immediate future looked like.
"Good question. I don't think that the spec war is necessarily over. Hopefully all the crowing has come to an end, because when you get to it, customers don't really follow processor speeds and different modes of connectivity, because eventually all smartphones will have these in place.
We'll still see concern over how much faster processors will become or how big screens get, but that will be most vendor-vs-vendors upsmanship.
For me, it's not so much the specifications as it is the overall experience, and that's going to be worth watching. 41 mega-pixel camera on a 330 ppi screen means virtually nothing, but if you can zoom in on a picture and get better detail or make some edits on the fly? Now that's a smartphone worth looking at a bit closer." - Ramon Llamas, Research Manager with IDC's Mobile Phone team
What's your perspective on the situation? As a consumer of smart devices, do you see yourself moving toward the most affordable option, or will you continue to keep up with the biggest and the best for the forseeable future?