Smartphones to outsell feature phones in 2013 for first time

It is finally happening. Smartphones are finally overtaking feature phones in worldwide sales, thanks to falling prices on smartphones and 4G networks, market researcher IDC said today.

For years, analysts have been predicting that smartphones would one day supplant basic feature phones in terms of worldwide sales, and that day is expected to finally come in 2013. According to the report, IDC estimates that manufacturers will ship 918.6 million smartphones in 2013, which is about 50.1 percent of the industry's total shipments. This number is expected to grow to 1.5 billion in smartphone shipments by the end of 2017, which will be represent about two-thirds of the total cell phone shipments, according to IDC.

IDC says there are two main reasons why smartphones -- which can surf the Web, access e-mail, act as GPS navigation devices, and check you into your favorite coffee shop via dozens of social media apps -- are so popular right now. The most important is the fact that prices have fallen dramatically across the globe on smartphones. But also important is the fact that carriers around the globe are starting to deploy faster 4G, or fourth generation, cellular networks.

Strong demand in developing countries with large populations such as China, Brazil, and India is driving much of the demand. This is a big shift from the past, according to IDC. To date, much of the world's smartphone shipments were to customers in mature markets, such as the U.S. But now it looks like consumers in these other less-developed markets are now jumping on board the smartphone train. And sales to these countries are expected to outpace sales in markets like the U.S. in the not-so-distant future. In fact, last year more smartphones were sold in China than in the U.S., according to IDC.

"While we don't expect China's smartphone growth to maintain the pace of a runaway train as it has over the last two years, there continue to be big drivers to keep the market growing as it leads the way to ever-lower smartphone prices, and the country's transition to 4G networks is only just beginning," Melissa Chau, senior research manager for IDC Asia/Pacific, said in a press release. "Even as China starts to mature, there remains enormous untapped potential in other emerging markets like India, where we expect less than half of all phones shipped there to be smartphones by 2017, and yet it will weigh in as the world's third largest market."

China is expected to have the largest smartphone market in 2013, with 301.2 million shipments. The U.S. is expected to come in second followed by the U.K., Japan, and Brazil, according to IDC.

This forecast jibes with what the big smartphone manufacturers have been talking about recently. At last week's Mobile World Congress trade show in Barcelona, companies such as Nokia were talking up plans to launch lower-cost devices for less-developed markets. There has also been talk of Apple developing a low-cost version of its iPhone constructed of all plastic for these markets.