Geographical Shift In Tablet Growth Drivers
BMI View: Our forecasts for global smartphone and tablet demand show the market's peak growth to have passed. Device improvements mean longer replacement cycles and the smartphone and tablet segments have reached saturation in the majority of developed markets. While we forecast slowing sales growth, we maintain our view that the key centres of demand will shift towards emerging markets such as Sub-Saharan Africa.
Emerging markets often leapfrog technologies, owing to factors such as weak communications infrastructure and low consumer spending power. Although internet usage and access is expanding across Sub-Saharan Africa, consumers will not be accessing online content using PCs and notebook computers as these form factors remain expensive. Instead, the majority of African consumers will experience internet services on smaller touchscreen devices such as smartphones and tablets. We have long held the view that smaller devices will be many Africans' first route to online platforms.
Data from local mobile operators show the fast take-up of smartphones led by increasingly affordable mobile data plans and cheaper smartphones targeting middle-to-low income consumers. Device manufacturers have expanded their presence in the region, manufacturing low-cost smartphones and tablets with a view to meeting regional demand ( see 'Samsung Factory Underscores Hub Status' July 23 2014). Sub-Saharan Africa still offers the fastest growth potential in total mobile subscriptions, but there is even greater growth potential in the 3G segment. While our forecasts show continued high shares in 2G connections, we note that there is considerable upside potential to our forecast as the availability of devices increases and operator are able to lower access costs for consumers.
|Catching Up To Developed Peers|
|Monthly Mobile Data Traffic (TBmn)|