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.
|Catching Up To Developed Peers|
|Monthly Mobile Data Traffic (TBmn)|
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.
|3G Growth Boosting Tablet And Smartphone Demand|
|Africa Mobile Outlook|
For telecoms operators this will encourage growth in data usage, while we expect the trend will see more low-cost tablets and smartphones targeting consumers in sub-Saharan Africa. Locally developed content will gain ground and drive up data demand, with Middle East and Africa data usage showing 70% CAGR over 2013-2018, according to Cisco's Visual Networking Index. However, the region will only account for around 10% of data usage by 2018 owing to consumers' less data-heavy devices and lower bandwidth requirements.
|Emerging Markets To Take Greater Share|
|Global Tablet Forecasts (mn)|
Although tablets and smartphones in Sub-Saharan Africa are likely to have even longer replacement cycles than devices sold in developed economies, we forecast growth will be high over our five year forecast period as current ownership levels are low. Telecoms operators report increasing numbers of smartphones on their networks and strong growth in data connections, supporting our view that consumers will see the internet via apps and touchscreens rather than larger and more expensive PCs and notebooks.