IDC: Smartphone growth to enter single-digit era from 2016

IDC said 2015 was likely the last year when global smartphone shipment growth exceeded 10 per cent, with single-digit growth now expected to be the trend until 2020.

The research group said its most recent projections show that shipments would reach 1.5 billion in 2016. This would represent an increase of 5.7 per cent compared to 2015, when smartphone shipments increased by 10.4 per cent to 1.44 billion, according to IDC figures.

The forecast from IDC contrasts from that of Canalys, which recently said that growth in 2016 would still be over 10 per cent and also forecast 1.5 billion shipments for this year. Canalys estimated that shipments were below 1.4 billion in 2015, according to a chart from the company.

IDC, meanwhile, said the trend of single-digit annual growth is expected to continue throughout the next five years, with volumes increasing to 1.92 billion in 2020. The market will continue to see volumes shifting to low-end devices with the aggregate market average selling price (ASP) dropping from $295 (€269) in 2015 to $237 in 2020, IDC added.

From a regional standpoint, mature markets like the U.S., China and Western Europe all hit single-digit growth in 2015, while high growth markets such as India, Indonesia, the Middle East and Africa, and other pockets in Southeast Asia, all remained healthy.

IDC analyst Ryan Reith said the slowdown in the more mature markets has "some grave consequences for Apple" as well as high-end Android devices "as these were the markets that absorbed the majority of the premium handsets that shipped over the past five years."

Reith said Apple's move into the trade-in business with its "Trade Up with Instalments" programme is aimed at further increasing churn in some of its most lucrative markets despite the high penetration rates.

"By entering this space, Apple can more tightly control the trade-in offerings, as well as monitor the demand for where these perfectly functioning one-year old iPhones end up. The latter is just as important as the trade-in location as it will give Apple a strong pulse on areas of high demand but perhaps less disposable income," the analyst commented.

Overall, IDC expects 2016 to be relatively flat regarding iPhone volumes, following a "tremendous year" in 2015 when Apple iPhone shipments hit a new record of 231.5 million for growth of 20.2 per cent over 2014. Growth should then return in 2017 and beyond as its trade-in programmes will expand into markets outside of North America and help drive churn.

Shipments of smartphones based on the Android operating system (OS) are expected to increase from 1.17 billion in 2015 to 1.62 billion in 2020, raising Android's overall share of the smartphone market from 81 per cent to 85 per cent.

For more:
- see this IDC release

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