During the same period, growth in China slowed down to 1% QoQ, while other emerging markets in APEJ surged ahead with 22% growth. The tier-1 Chinese vendors have extended their reach outside of PRC and their shipment contribution from APEJ countries excluding PRC has increased over the past few quarters.

India led QoQ smartphone growth in the region with 23 million units shipped in 2014 Q3, and added around 5 million units to the market over 2014 Q2. The local vendors in India, particularly Micromax and Lava, gained most from increased shipments of the 4.5" to 5” smartphone category priced at around US$100.

As a result, Micromax has extended its leadership in India and claimed 20% share in the India smartphone market in 2014 Q3. Other emerging countries in the region also showed high growth rates and together shipped 23 million smartphone units in 2014 Q3. In particular, Thailand, Philippines and Indonesia surged ahead in South East Asia (SEA) with almost double the shipments in 2014 Q3 compared to a year ago.

Overall, local and Chinese vendors have gained at the cost of global vendors. The impact was more pronounced in SEA where global vendors’ share dropped from 62% in 2013 Q3 to 43% in 2014 Q3.

"The local vendors have leveraged their strengths and understanding of the local market, coupled with aggressive marketing to grow their scale in the

IDC expects the share of phablets (5.5"<7" screen size) to steadily increase from 16% in 2014 to 34% in 2018.

"In mature markets, we expect large screen iPhones to be the key driver, while in emerging markets, budget phones on Android operating system in the 5.5"<6" category are expected to have a strong growth momentum. Even as 7" voice calling tablets are gaining traction in the emerging markets in the region, the more "mobile" phablets will continue to gain momentum, as we have yet to see a significant proportion of consumers who buy the voice calling tablets actually using it as their primary phone," adds Kaur.