Global Smartphone Shipments Top 1 Billion For The First Time Thanks To Cheap Android Devices, Says IDC

The global smartphone market shipped one billion units in a single year for the first time, with Samsung as the leading vendor, according to a new report by research firm IDC’s Worldwide Quarterly Mobile Phone Tracker.

Neither fact will come as a surprise if you follow quarterly reports¬†about the mobile market. In fact, Strategy Analytics just put out one with similar figures, though its report said total shipments fell just short of the 1 billion milestone, with 990 million shipped. But what is interesting is that the smartphone market’s growth is now being largely driven by demand for very cheap Android devices–some less than $150–in emerging markets like China and India.

The accessibility of smartphones means that featurephones will quickly start to phase out in those markets, and companies like Nokia may have to rethink their product portfolio. It may also lead to challenges for companies like Huawei, Lenovo, and LG, which will have to figure out how to continue growing on the already razor-thin margins for cheap smartphones.

In the report, Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker, noted that the top two trends driving smartphone growth are large screen devices and low-cost, with the latter being “the key difference maker.”

“Cheap devices are not the attractive segment that normally grabs headlines, but IDC data shows this is the portion of the market that is driving volume. Markets like China and India are quickly moving toward a point where sub-$150 smartphones are the majority of shipments, bringing a solid computing experience to the hands of many.”

Last year, vendors shipped slightly more than 1 billion smartphones, a 38.4% increase from 725.3 million units in 2012. Smartphones made up 55.1% of mobile phone shipments in 2013, up 41.7% from the year before. In the global market for mobile phones (including smartphones), vendors shipped 1.82 billion units, a 4.8% increase from the 1.74 billion units shipped in 2012.

As expected, Samsung continued to lead in worldwide smartphone shipments. Samsung saw a decline in 4Q2013 shipments, but still maintained a double-digit lead over Apple.

The Cupertino-based company posted record shipment volume in the quarter, thanks to the launch of new markets for the iPhone 5s and 5c, but it still had the lowest year-on-year increase of all the leading vendors.

It remains to be seen if that gap will be closed now that China Mobile, the world’s largest telecom by subscribers, has finally started offering both of Apple’s smartphones.

Huawei, which maintained its number three position, enjoyed the highest year-on-year increase among the leading vendors, while Lenovo and LG took the fourth and fifth spots, respectively.

As TechCrunch’s Ingrid Lunden noted yesterday, LG, Huawei, and Lenovo now face the challenge of figuring out how to sustain growth on the tight profit margins of cheaper smartphones. If they can’t, they may end up in the same positions as Nokia, BlackBerry, and HTC, which have all fallen about of the top five rankings.

“The sheer volume and strong growth attest to the smartphone’s continued popularity in 2013. Total smartphone shipments reached 494.4 million units worldwide in 2011, and doubling that volume in just two years demonstrates strong end-user demand and vendor strategies to highlight smartphones,” wrote Ramon Llamas, research manager with IDC’s Mobile Phone team.