Smartphone market to be worth $355 billion in 2020

smartphones• 30% penetration in Nigeria

There has been appreciable growth in smartphone penetration across the globe, with the market worth expected to hit $355 billion by 2020. According to a new study 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.
 
Indeed, in Nigeria, as at third quarter of 2016, smartphone penetration, according to Africa Infotech Consulting (AIC) was 30 per cent with features phones having 70 per cent penetration.

 
The impact of the smartphone is its ability to bridge the technology and infrastructure gap that exists in the developing world. Besides, access to mobile technology, and increasingly affordable smartphones, offers incredible promise and economic opportunities for individuals and companies globally.  
  
According to Ian Fogg, a director at IHS Technology, “Mobile innovations, new business models and mobile technologies are transforming every adjacent market as the mobile industry diversifies from the maturing smartphone market, “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 threaten further disruption.”
  
IHS said 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 eight per cent rate.
 
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.
  
According to the Director at IHS Technology, Jack Kent, Latin America will see an average growth rate of 23 per cent compared with the global eight per cent average yearly rate.

“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 per cent 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.



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