IDC expects more Apple-style smartphone trade-in programmes, as global growth slows to below 10%

IDC expects more smartphone vendors to follow Apple's lead by introducing device financing and trade-in programmes to stimulate shipments, as it predicted that 2015 would be the first year that growth in smartphone shipments slows to a single-digit figure.

The company said Apple's iPhone Upgrade Programme, which aims to stimulate the upgrade cycle in developed markets, is likely to be mimicked by rival smartphone vendors in the coming months. IDC said financing and trade-in programmes are an effective way to maintain sales of the high-end, flagship models that are bearing the brunt of the global slowdown in shipments growth.

IDC forecast global smartphone shipments will grow by 9.8 per cent through 2015 to 1.43 billion units. If accurate, it would be the first time that shipments growth has dipped into single-digit figures, the company said.

The research company attributed the bulk of the lower growth to a slowdown in sales in China. The market is already awash with first-generation smartphones, meaning it is now more of a replacement market. As such, China is likely to record low single-digit shipments growth in 2015, IDC predicted.

In contrast, shipments in Middle East and Africa (MEA) are tipped to grow at over 50 per cent year-on-year in 2015, spurred by demand for low-cost smartphones by first-time buyers.

Ryan Reith, program director for IDC's Worldwide Quarterly Mobile Phone Tracker report, said shipments of low-cost devices in emerging markets will become key to maintaining momentum in the coming years. However, he noted that such success will "depend on capturing value-oriented first-time smartphone buyers as well as replacement buyers."

IDC predicts that replacement cycles in high-growth markets "will be less than the typical two-year rate, mainly because the components that comprise a sub-$100 [€91.94] smartphone simply do not have the ability to survive two years," Reith added.

Slowing shipments growth in China will be compounded by a similar pattern in Western Europe, Latin America, and Asia Pacific (excluding Japan) between 2015 and 2019. The company noted that lower forecasts for Windows Phone smartphones is the main cause of the slowdown in those markets, along with a decline in devices running alternative operating systems.

The research company forecast that Android would continue to dominate the global smartphone operating system market for the foreseeable future, with its market share set to grow from 81 per cent in 2014 to 82 per cent in 2015. IDC maintained its prediction that iOS would hold a global market share of between 14 per cent and 15 per cent annually, with spikes around new product launches. However, Windows Phone is unlikely to see significant growth, which IDC said is mostly due to the lack of OEM partner support.

For more:
- see this IDC release

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