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MWC preview: smartphones still to dominate, wearables what's next

Monday 10 February 2014 | 13:14 CET | Background

The Mobile World Congress, set for 24-27 February in Barcelona, offers a podium for companies and industry groups to lay out the future of 'mobile'. The event has become more than just an opportunity to present the latest smartphones and tablets. Organiser GSMA has chosen for this year the theme 'Creating What's Next'.

Last year's MWC attracted around 72,000 visitors from more than 200 countries, with some 1,700 companies presenting the latest technology. This year should offer the same, with an even bigger assortment of connected devices. Wearable technology is for example just one of the promised new markets. 

 

Highlights 2013  

  • Samsung launched the Galaxy Note 8.0 to compete with Apple's iPad mini. The Korean company chose to present its flagship smartphone, the Galaxy S4, at its own event a few weeks later. 
  • Huawei presented the high-end Ascend P2 smartphone with LTE, the successor to the P1 unveiled a year earlier at CES. Huawei also launched a new brand awareness campaign at MWC, as part of continued efforts by the Chinese manufacturer to expand its name recognition beyond Asia.
  • LG introduced two new product lines, the F series and LII series, in order to reach more price points across the market. The new series target respectively the low end and mid-market. LG also presented the Optimus G Pro phablet.
  • Sony called 2013 its breakthrough year, when it would grow to a bigger role on the global market after it bought out Ericsson in their handset joint venture. Sony presented its top phone, the Xperia Z, a month earlier at CES, and launched at MWC 10.1-inch tablet with LTE.
  • ZTE showed two devices, the ZTE Open running the Firefox OS and the ZTE Grand Memo on Android. ZTE started out mainly serving China and emerging markets, but has been quickly expanding in the smartphone market with more devices available in more countries. It has moved up to the fourth-largest smartphone maker in the world.
  • Nokia introduced the Lumia 720 and 520 smartphones and the Nokia 301 feature phone. The phones were expected to give the company a better portfolio to target the low end of the market, where Windows Phone still has little presence.
  • In addition to the dominant players Android and iOS and the challengers BlackBerry 10 and Windows Phone, new operating systems are under development. At MWC, speeches were made by the companies behind FireFox OS, Ubuntu and Sailfish. These mainly target emerging markets and low-end phones to start. Samsung also discussed its plans for the Tizen OS and promised to introduce the first Tizen phone in 2013. 

   

More smartphones than feature phones

Smartphones had a successful year in 2013, the first year when more smartphones than feature phones were sold worldwide. Smartphone sales were especially strong in emerging markets, where many internet users are skipping the PC to go straight to mobile broadband.

In Q1, 210 million smartphones were sold worldwide, equal to annual growth of almost 43 percent, according to Gartner. Smartphones accounted for 49.3 percent of all phones sold in the quarter, up from 34.8 percent a year earlier. In the second quarter of 2013, smartphone sales surpassed feature phones for the first time. Smartphone sales rose 46.5 percent year-on-year to 225 million units, good for 51.8 percent of the total handset market. 

In the third quarter, smartphone sales advanced further to 250.2 million units, an annual increase of 45.8 percent. Growth was strongest in Asia, at 77.3 percent. As a result of the continued growth in Q4, smartphones passed 1 billion units sold in 2013 for the first time. 

Due in part to the growing share of emerging markets such as China and India, the average price of a smartphone fell to USD 337 last year from USD 387 in 2012, according to IDC. This led most manufacturers to consider whether they would focus on maintaining margins by targeting developed markets or go for high volumes in emerging markets.

This was not an easy choice for everyone. Apple for example decided against launching an iPhone that could compete on price with the numerous Android devices at the low end of the market. HTC also stuck to a focus on the premium market in 2013, with the launch of the HTC One at the start of the year, but has since said it is working on expanding its portfolio of mid-range devices. BlackBerry launched its flagship Z10 in early 2013 and is still working on expanding its portfolio further.

 

Wearables new growth market

Now that smartphones have become mainstream and feature phones are increasingly thin on the ground, the manufacturers are looking to diversify their range of connected devices. Wearable technology, such as smart watches and smart glasses, entered the spotlight in 2013 and is expected to feature strongly in this year's product line-ups. Wearable technology is seen as the next phase in continuous connectivity, part of the bigger concept of the Internet of Things, where everything from cars to refrigerators will be connected.

Wearables are still in the gadget phase, as was seen recently at CES, but smartphones were in a similar position 5-6 years ago. Samsung, Sony, LG and Huawei and even chipmakers Intel and Qualcomm have introduced wearable devices, and a number of start-ups are also hoping to break open the market with the help of crowdfunding. More types of wearable device can be expected to see the light at MWC.

Smartphones will likely be the top attraction still at MWC, which makes sense given their much more significant sales. Wearables are still be a tiny market. However, according to Deloitte, products such as smart glasses, smart watches and smart fitness bands will grow to sales of 10 million units or USD 3 billion in revenues in 2014. MWC will be the opportunity for manufacturers to show what the new devices can do and their potential to become a mass market.

 

Consumers still unsure about wearables 

A recent study by Accenture found that less than a third (29%) of the British plan to buy a smart watch soon. Even fewer (26%) showed interest in buying smart glasses. The international survey found stronger interest across a wider range of six countries. In Australia, Canada, India, South Africa, the US and the UK, an average 46 percent of respondents were interested in a smart watch and 42 percent said they would consider buying smart glasses. 

A global survey by NPD Group found that an average 23 percent of consumers plan to acquire a smart watch and 20 percent would like to buy smart glasses. Telecompaper's own Consumer Panel found the Dutch were less than interested in the new wearable technology, with a majority saying they have no plans to buy a smart watch or smart glasses in the next year.



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