Modular Phones Market is Estimated to Reach $80 Billion Per Year by 2018

By Alex Ray - ModularPhonesForum.com

Google’s vision of inexpensive smartphones made up of a set of modules is getting closer to reality. The company will start selling its first modular phone in Puerto Rico later this year. Recently Google held a conference, where developers were given technical instructions and specifications for creating modules. Furthermore, they even revealed the module design and packaging concepts. The details spread very fast, making modular concept popular on social media and development platforms. So, it’s the right time to begin forecasting the popularity and sales of such devices in the coming years.





Recently, a research on the smartphone market was conducted by a respected research and analysis company IDC. IDC categorized the smartphones based on their operating systems:

Android



IOS



Windows



Other Operating Systems



The paper forecasts year-to-year growth in the coming years, both in terms of the number of units sold and also the US dollars. The total number of smartphones sold per year will rise from 1.3 billion in 2014 to 1.9 billion by 2018. The market share of Android phones is expected to remain constant, i.e. around 80%. However, the revenue generated by Android phone manufacturers is expected to go down by around 7% (current share is around 67%). It’s because of the rising popularity of smartphones with a low price tag in highly populated developing countries. By 2018 the total revenue generated by smartphones sales is expected to reach around $450 billion.



On top of the research done by IDC, we did some research of our own. Firstly, we estimated the initial modular phone shipments in 2015. Google will launch the Ara in Puerto Rico, where the total number of mobile users can be rounded to 3 million. Due to high speculations and buzz on the web, it is likely that many Puertoricans think of grabbing one for themselves. But, the chances of it creating heat waves isn’t likely because the concept of the Ara is entirely new and people treat new concepts with caution. They would probably expect their highly tech savvy friends to get one, and later buy one for themselves depending on their experience. Going down on these, we concluded that only around 2% (around 50K) of the Android users in Puerto Rico would lay their hands on the modular phone in the first year.



Modular phones are expected to arrive in all countries by 2016, but still the number of Android users buying a modular phone will be quite low, i.e. around 2%, which is the same number of modular smartphones expected in Puerto Rico. Here, we didn’t take into consideration the number of iPhone users who may switch to modular phones, this makes our calculation even more conservative. By 2016, we expect around 25 million modular phone owners. This is a staggering growth, but the real popularity of a modular phone can only be visible by 2017 and 2018. Modular phones are expected to be widely popularized and promoted on the web and in all types of media. We believe that positive reviews from users will push the market to a whole new level.



A fair vision and estimate tells us that in 2017 the number of Android users who will opt for a modular smartphone will be 10% and around 30% in 2018, which is roughly equals to 140 million and 450 million respectively.



The market pilot in Puerto Rico will bring around $10 million in sales in the first year and in 2016 it will rise to $5 billion after a global launch of Ara. Moving ahead, in 2017 and 2018 the market volumes are estimated to be around $25 and $80 billion respectively. This is an impressive figure; $80 billion is almost equal to the annual GDP generated by Ecuador or business profits Microsoft makes in a year!



After 2018 the new market factors are expected to sprout. This will further drive the demand for various categories of modules. The forecast is getting more complex, still it remains intriguing.

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