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As the higher end of the smartphone market becomes increasingly saturated and prolonged upgrade cycles threaten to hamper further growth, price becomes the most important growth driver in the smartphone industry.
According to IDC, the average selling price of smartphones worldwide will drop from $337 this year to $265 by 2017, enabling more and more people outside North America and Western Europe to make the switch from feature phones to smartphones. The drop in smartphone prices is mainly driven by Android phones, as Google's open source operating system lowers the barriers for new manufacturers to enter the smartphone market, particularly in the low-cost segment.
IDC expects global smartphone shipments to grow at an average growth rate of 18 percent until 2017, with most of the growth occuring outside of Europe and North America.