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February 17, 2015updated 19 Aug 2016 3:59pm

1.2bn smartphones sold in 2014 but slowdown ahead

Gfk predicts that market growth will level out this year.

By Alexander Sword

Over 1.2 billion smartphones were shipped in 2014, according to research by Gfk.

The market research company found that the burgeoning market hit a new milestone in Q4 2014, generating $115 billion in sales in the quarter, an increase of 20 percent year-on-year.

Globally, the number of units shipped in the quarter hit 346 million, a 19 percent increase on Q4 2013.

The research shows that all regions saw year-on-year growth except for Developed Asia-Pacific (APAC) countries, where subsidy changes in South Korea had a negative impact. Latin America saw the highest growth with shipments up 43 percent.

While China is set to remain the biggest market, the number of sales was flat year-on-year. However, the value of units sold increased 21 percent year-on-year, showing that the country’s growing middle-class is choosing to splurge on higher-end products.

Kevin Walsh, Director of Trends and Forecasting at GfK says: "The increase in the value of units sold in China, despite the recent plateauing of unit sales, is due to consumers’ rapid adoption of higher priced smartphones with larger screen sizes.

"This is a trend seen in most markets and GfK global data shows that the 5 to 5.6 inch segment grew by more than 130 percent year-on-year in the last quarter of 2014 and by nearly 150 percent in the full year. In 2015, we forecast this segment to become the dominant screen size band, surpassing 4 to 4.5 inch for the first time."

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While units shifted will grow in 2015, the growth rate is levelling out. There is, however, still some room for growth in Emerging APAC, Middle East and Africa.

Walsh continues: "The slowdown forecast for 2015 is due to developed markets reaching saturation point. As a result, global smartphone unit growth will be only 14 percent this year, down from 23 percent in 2014. We forecast emerging regions to drive growth in 2015 as smartphones further penetrate lower price points.

He adds: "GfK forecasts that smartphone price bands above $150 will see a decline in their market share. At the next level down, $100-150, sales will remain stable, but it is the cheaper smartphones priced below this point that will gain share."

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