Smartphone sector set for end of double-digit growth - Mobile World Live

Smartphone sector set for end of double-digit growth

04 MAR 2016

Smartphone market growth will drop to single digits this year, marking the end of the era of 10 per cent plus growth, as a number of important markets reach maturity, according to IDC.

Last year, the market grew by 10.4 per cent to reach 1.44 billion units. For 2016, the research firm is forecasting a 5.7 per cent growth to 1.5 billion, with the trend of single-digit year-on-year growth expected to continue to 2020.

From a regional standpoint, mature markets such as US, China and Western Europe hit single digit growth in 2015, while high-growth markets such as India, Indonesia, Middle East and Africa, and other parts of Southeast Asia, remained healthy.

The slowed growth will be accompanied by a continued shift of volume to the low-end, with aggregate market average selling price dropping to $237 in 2020 from $295 in 2015.

“The mature market slowdown has some grave consequences for Apple, as well as the high-end Android space, as these were the markets that absorbed the majority of the premium handsets that shipped over the past five years,” said Ryan Reith, program director with IDC’s Worldwide Quarterly Mobile Phone Tracker.

Reith suggested that Apple’s introduction of trade in and instalment plans is intended to “further increase churn” in its most lucrative markets, despite the high penetration rates.

In terms of platforms, Android will see its market share increase in the period to 2020, with the biggest volume “clearly within the low-cost space”. iOS market share will decline, although while 2016 is expected to be flat in volume terms, IDC is forecasting a return to growth from 2017 as Apple extends its trade-in efforts.

The research firm also said with Microsoft driving sales of Windows Phone with its own hardware, “it remains unclear how serious the Windows Phone offerings will be from OEMs”.

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