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Demand for cell phones will continue to rise through 2014.Global shipments of cellular handsets will rise nine percent to a record 1.55 billion units in 2011, up from 1.4 billion in 2010, according to researcher IC Insights.
Shipments will also increase eight percent in 2012 before declining slightly in 2013 because of a cyclical slowdown in demand, according to the Scottsdale, Ariz.-based researcher. By 2014, cell phone sales will reach 1.79 billion units.
An increasing percentage of cellular handsets will be smart phones. Smart phones accounted for about 25 percent of total handset shipments in the first quarter of this year, compared to 16 percent in the same quarter in 2010. In 2011, total smart phone shipments are forecast to grow 60 percent to 440 million units, after increasing 56 percent to 275 million in 2010, according to IC Insights.
Smart phone shipments are expected to rise at a compound annual growth rate (CAGR) of 37 percent from 2009-2014. That growth rate is more than five times the projected compound annual growth rate of total cell phone unit shipments, which will be about seven percent over the same period.
About 47 percent of all cell phone handsets shipped in 2014 will be some type of smart phone, up from 19 percent in 2010.
The strong growth of cell phones, especially smart phones, will have an impact on the semiconductor market. Besides growing unit shipments, which drive semiconductor demand, the amount of semiconductor content in each cell phone handset is rising.
The average integrated circuit content per cell phone in 2010 totaled $29.79, up from $27.86 in 2009, according to Brian Matas, vice president of market for IC Insights.
The average cell phone has about $12.28 of logic, $7.16 of analog, $7.26 of memory, and $3.09 of microcomponents, Matas reported. That content will increase as more smart phones ship. Smart phones have higher semiconductor content because of increased functionality. For instance, a typical smart phone contains seven times as much NAND flash memory as a typical 2G handset.
In 2010, the three highest value ICs in an average cell phone were application-specific logic at $10.46, application-specific analog at $6.11, and flash memory at $4.84, according to IC Insights.