China will overtake US as largest smartphone market, lowest penetration in India: IDC Report

China will become world’s largest market for smartphones overtaking United States fueled by strong desire for low priced devices even as India remains the market with lowest smartphone penetration, according to the latest report by International Data Corporation which tracks mobile phone shipments worldwide.

World’s most populous country, China, will now account for nearly 26.5% of the smartphone shipments in 2012 compared with just 17.8% in the United States, according to the worldwide quarterly mobile phone tracker by IDC.

Chart: 2011, 2012 and 2016 Smartphone Shipment Market Share, Top 5 CountriesDescription: Tags: Author: IDCcharts powered by iCharts

Analysts at the market research firm say that high penetration of the smartphones in People Republic of China is due to the surge of the sub-200$ Android devices, which would further lower down to $100 in the near future due to competition among the vendors. Carrier subsidized devices and customized handsets from the local vendors coupled with the launch of next-gen technologies like 4G are expected to act as growth catalyst for the smartphones.

Apart from China and the United States, which currently hold the title for the top two smartphone shipments in the world, over the next five years the mobile demographics would change rapidly with the presence of high growth countries like Brazil and Russia, which would become hotly contested destination for smartphone vendors to capture the new customers and the market share.

Smartphone penetration currently is lowest in India in the Asia/Pacific region and thus it has tremendous growth potential by tapping into the vast number of feature phone by offering them exciting plans to upgrade to the smartphones. The current market is dominated by $100 devices, which tend to be feature rich with unique features like dual-sim capabilities. As the popularization of 3G takes place with data plans becoming affordable and subsequently the widespread launch of  the 4G technologies in different parts of the country the market will be driven toward the smartphones.

Tier II and III towns are expected to provide the next level of growth with operators providing affordable service plans for smartphone adoption. India which currently holds a measly 2.5% of the world share will grow to 8.5% by 2016 capturing the third spot. But what has always been interesting in India’s story is the rate at which it would grow, which stands at a massive 57.5% between 2011-16 making it the fastest growing smartphone economy in the world.