According to market figures released by research firm IDC, China is bound to overtake the U.S. in smartphone shipments by the end of 2012, becoming the leading market. IDC’s latest Worldwide Quarterly Mobile Phone Tracker forecast that China’s smartphone market will climb from 18.2 percent in 2011 to 20.7 percent in 2012, while U.S. market would drop from 21.3 to 20.6 percent over the same period.

A distant third, the UK held 5.3 percent of the smartphone market in 2011, but will not be able to keep up with the volume of smartphone shipments in emerging markets. The research firm predicts the UK would fall into fifth place by 2016, with a share of 3.7 percent, while Brazil would hold 4.7 percent and India 9.3 percent.

Emerging Markets

“Due to their sheer size, strong demand, and healthy replacement rates, emerging markets are quickly becoming the engines of the worldwide smartphone market,” said IDC analyst Ramon Llamas.

China is currently on second place for smartphone shipments, but its strong performance so far this year led IDC to estimate it will surpass the U.S. by the end of 2012. Meanwhile, India will reach seventh place, then third place by 2016, and Brazil will rise from the current eleventh spot to fourth by 2016. The UK is expected to drop from the current fourth to fifth place.

Low-Cost Android Smartphones, Key Growth Driver in China

According to IDC, low-cost Android smartphones priced under $200 were a key growth driver in China. Moreover, as chipset prices drop and competition heats up, smartphones will continue to become more affordable. China’s Huawei, ZTE and Lenovo will also be major growth drivers by supplying carriers with customized handsets, while Nokia and Samsung will increase volume with more affordable low-end smartphones, added the firm.

“The total cost of ownership remains a hurdle for potential smartphone buyers,” said Llamas. “Smartphones still represent a significant investment for consumers in many countries.” In order to drive growth, smartphone vendors ought to develop lower-cost alternatives to smartphones, while operators should “creatively subsidize device cost and data plans,” added the analyst. The popular Android phones, priced under $200, are expected to continue as a major growth driver in the smartphone market.

(reported by Alexandra Burlacu, edited by Wendy Li)