Smartphone prices are dropping, and will continue to dip through '18

That's true even for the iPhone, says IDC

Here's some good news for smartphone buyers: Average global smartphone prices have dropped and will continue to do so into 2018 -- and that includes prices for Apple's iPhone.

That prediction comes from IDC, which says the average, unlocked selling price worldwide of an iPhone this year will be $657. In 2018, that price is expected to fall to $604.

Android phones are much lower in price on average, given the wide range of high- and low-end Android phones from a variety of manufacturers. Android smartphones will sell on average for $254 unlocked in 2014, and for $215 in 2018; Windows Phone prices will average $265 this year and $214 in 2018 -- the lowest of the major manufacturers, IDC said.

Overall, the average selling price for all smartphones this year will reach $314, down 6.3% from last year's average selling price of $335. By 2018, the average price will be $267, IDC said.

Even so, a decline in price is not expected to indicate a decline in quality, IDC said. That's because components like displays and processors that were used in top-of-the-line smartphones two years ago are still viable and can be used in lower-cost smartphones.

IDC said the Moto E, introduced by Motorola earlier this month, is a good example of an extremely affordable device that still offers a "good enough" user experience that will suit many buyers.

The Moto E costs just $129 unlocked, and has gotten positive marks for its bright and colorful display (even though it is smaller than most, at 4.3-in.) and a relatively large battery at 1980 mAh. Some reviewers, though, dinged it for using an underpowered 1.2 GHz dual core Snapdragon 200 processor from Qualcomm, for lacking a front camera and LTE access and for its 4GB of built-in storage.

But various analysts have said many one-time feature phone users who are converting to a smartphone for the first time might not care much about a front camera or LTE service.

IDC released its forecast of smartphone prices on Wednesday along with its prediction that global smartphone shipments will jump by 23% in 2014, hitting 1.2 billion smartphones. In 2018, 1.8 billion smartphones will ship, the analyst firm predicted.

The biggest growth will occur in emerging markets, such as India, Indonesia, Russia and China, IDC added, with China accounting for nearly one-third of all smartphones shipped in 2018. It's in such markets that lower cost smartphones like the Moto E will help overall smartphone volumes surge.

IDC smartphones chart
IDC expects the biggest growth in smartphone sales will occur in emerging markets. (Chart: IDC)

Android will remain by far the largest OS this year, IDC said, with 80.2% of the market, followed by iOS at 14.8%, Windows Phone at 3.5% and BlackBerry at 0.8%. Only Windows Phone will increase market share by 2018, reaching 6.4%, while Android will drop to 77.6% that year, followed by iOS at 13.7%.

Even with share declines, both Android and iOS will see their smartphone shipments increase by 12% and 10%, respectively, in each of the next four years as overall sales continue to rise.

Because emerging markets are driving overall market growth in the next four years, Apple is the least prepared to take advantage of that shift. "The appetite for smartphones in these markets is at the sub-$200 level, significantly below Apple's selling prices," IDC noted. Apple will continue to be strong in mature markets like the U.S., where major carriers heavily subsidize prices when a customer agrees to a two-year contract.

Windows Phone, while just 3.5% of the market now, is expected to grow from 43 million phones shipped in 2014 to 115 million in 2018. Its overall growth will be 28% per year, ahead of the overall market's growth of 12% annually.

IDC predicted BlackBerry shipments will reach just 4.6 million phones in 2018, half the 9.7 million units expected to ship this year. IDC added, "the only way the company will be viable is likely through a niche approach based on its security assets."

Matt Hamblen covers mobile and wireless, smartphones and other handhelds, and wireless networking for Computerworld. Follow Matt on Twitter at  @matthamblen or subscribe to Matt's RSS feed. His email address is

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Copyright © 2014 IDG Communications, Inc.

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