Smartphone market worth $355 billion in 2020, with 6 billion devices in use
What have we become? © Flickr/cc-licence/Nicolas Nova
- Smartphones and tablets account for 60 per cent of all smart connected consumer devices
- Messaging and communications apps to grow to 7.5 billion users by 2020
- Consumer spending on mobile apps is set to reach $74 billion by 2020
- More than 120 million active mobile money accounts in emerging markets in 2016
The mobile phone sector may no longer show the stratospheric growth rates of the previous decade, but it is still expanding and there’s plenty of reasons to stop moaning and try and meet our insatiable need for instant communications.
According to a new study this week from IHS Markit, the global smartphone installed base will grow from four billion devices in 2016 to more than six billion smartphones in use by 2020. Globally, smartphones and tablets already account for more than 60 per cent of smart connected consumer devices, which is up from around 17 per cent in 2008., according to the company. Some regions are smarter than others – for instance, smartphones and tablets apparently make up more than 80 per cent of connected devices in Africa and the Middle East.
“Mobile innovations, new business models and mobile technologies are transforming every adjacent market as the mobile industry diversifies from the maturing smartphone market,” said Ian Fogg, Director at IHS Technology. “Revenues for smartphones shipped in 2020 will total $355 billion.”
We’ve already seen over the past few years how OTT messaging apps offering free or low cost communications have disrupted traditional telco SMS-based business models and their transition into providing wider service, commerce and device platforms threatens further disruption.
IHS says that these apps, such as Line and WhatsApp, boasted an aggregate audience of more than five billion active user accounts at the end of 2016. This is expected to grow to almost 7.5 billion by 2020. Africa and the Middle East will be the fastest-growing region at an average rate of 10 per cent to 2020, ahead of the global average 8 per cent rate.
Whilst we’re on the subject of apps, IHS believes that global consumer spending on mobile apps is set to reach $74 billion by 2020, up from $54 billion in 2016. Africa, the Middle East and Latin America will be the fastest-growing regions for mobile app spend. Africa and the Middle East are expected to grow at an average rate of 18 per cent each year to 2020.
“Latin America will see an average growth rate of 23 per cent compared with the global 8 per cent average annual rate,” said Jack Kent, Director at IHS Technology. “Africa, the Middle East and Latin America will be the fastest- growing regions in the next four years. There are many opportunities for new apps, mobile payments and mobile money services. Asia, notably, will continue to play the number one role in the global apps market – accounting for more than 50 percent of consumers' spending. ”
Those companies looking at the potential opportunity of mobile payments and mobile money services need to realise that it’s already a thriving sector. There were more than 120 million active mobile money accounts in emerging markets in 2016, according to the IHS Technology analysis. The number of addressable smartphones for device based payment services will increase from 2.7 billion in 2016 to more than five billion by 2020.
“Mobile payments and commerce are central to mobile innovation and will be critical for future growth,” added Kent. “Mobile money services have been a vital tool for financial inclusion in emerging markets, but elsewhere, mobile money services are looking to complement or disrupt traditional payments and financial services through the launch of app-only banking services, device-based payments from services such as Apple Pay, Android Pay and Samsung Pay, and payment integration via social media and messaging apps.
“In 2017, leading technology players will focus on the integration of payments and commerce as part of their wider mobile platforms and technology ecosystems,” Kent continued. “This integration across their range of devices, apps, content and services will be crucial if they want to tap into the next waves of growth.”