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TheStreet Open House

Here's the Surprising Country That Has Tons of Smartphone Users

Stocks in this article: APPLGOOG

NEW YORK (TheStreet) - Smartphone devices are taking over the world - quite literally.

According to a mobile usage report by eMarketer, the number of consumers who use smartphones across the world is expected to grow to 1.76 billion people, or 24.5% of the world's population in 2014, up from 1.4 billion people or 19.8% in 2013. By 2018, the number of people using smartphones is expected to rise to more than a third of the world's population, as eMarketer forecasts 2.76 billion, or 36.5% of the world's population, will be using smartphones by then.


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Where are the most popular countries for smartphone usage? The report estimates that consumers in Asia-Pacific countries will account for more than half of all global smartphone users this year, totaling about 951 million. But it is South Korea specifically, that currently holds the title of world leader in terms of smartphone penetration. As early as 2012, half of the country's population were using smartphones, the report notes.

Australia follows closely behind in smartphone penetration. Last year, it became the only other country in Asia-Pacific to have more than half its population using smartphones. This year, Japan will reach the 50% usage as well.

However, smartphone usage in China is not likely to surpass half of its population until at least 2018, but there is a very good reason for that - it's a big country. China's user base is already by far the largest in the world, totaling 521.7 million smartphone users this year. EMarketer does not predict consumers in other Asia-Pacific emerging markets will reach 50% smartphone penetration over the next five years.

The research firm estimates account for the number of individuals who own and use smartphones, regardless of the number of smartphones each of those individuals might have. The report notes that the figures do not tell the entire story of global smartphone usage as "advanced handsets have already saturated more than half the population in many countries, or will in the next few years."

Also See: How the Consumer Wins in the Wireless Wars

Also See: Why Japan Loves the iPhone 5s

"By 2015, we estimate that 15 countries worldwide will have seen more than half their populations adopt smartphones," says Monica Peart, eMarketer's senior forecasting analyst, in the report. "The embrace of mobile technology among nearly 500 million people in these countries will have wide-ranging influence on media usage, e-commerce and marketing."

One problem to adoption of smartphones in emerging markets is the price of the devices. Apple (AAPL) and Google (GOOG) Android-based phones like the Samsung Galaxy are still too expensive for consumers in those areas. Mozilla is eyeing opportunity in those emerging markets to sell a cheaper smartphone. The maker of the Firefox operating system plans to sell a $25 smartphone in India and Indonesia later this year, according to the Wall Street Journal. That said, Apple reported fiscal second-quarter results in April that topped Wall Street expectations, with shipments of iPhones fueling results. The company shipped 43.7 million iPhones, 16.4 million iPads, and 4.1 million Macs during the quarter.

During the conference call, Apple CEO Tim Cook said the company gained smartphone share in both developed and emerging markets including "the U.S., the UK, Japan, Canada, Germany, France, Vietnam and Greater China, just to mention a few. In fact, we established a new all-time record for total iPhone sales in the BRIC countries." Smartphone penetration in both the U.S. and the U.K. is also expected to reach 50% of the population this year, which will be "a major milestone for two of the most advanced Internet markets in the world," the report notes, with Canada to follow in 2015.

The U.S. is the second-largest smartphone market in the world, behind China, totaling 163.9 million users in 2014, says the report, however eMarketer forecasts India's rising status, in which it is expected to become the second largest smartphone market by 2016.

--Written by Laurie Kulikowski in New York.

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Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.

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